Tuesday - August 9, 2005
 Want to view the archive of past issues? Go to: http://at.zacks.com/?id=1344. Get Profit from the Pros content in Real-time. Learn more about this free tool at: http://at.zacks.com/?id=1452. Manage Profit from the Pros subscription: 1. FEATURED EXPERTS Here we cast the spotlight on a timely Featured Expert commentary that recently appeared on Zacks.com. Following the article you will find previews of other profitable commentaries with insights and recommendations from leading investment experts.
The utilities are on a flat out tear. Kelley Wright can’t remember when the markets have headed south with the utilities headed north, but he guesses there’s always the first time for everything. All joking aside, however, it is almost impossible to find anything approaching value in this sector right now. In contrast the money center banks like Citigroup (NYSE: C) and Bank of America (NYSE: BAC) offer good value and Mr. Market could care less. Washington Mutual (NYSE: WM) continues to entice by raising its dividend once again. As for C and BAC this may be more about growth versus value and which discipline the market perceives as the better play for now. With C being a bellwether, this could also be a statement by the market of a totally different kind. Whatever the case, Wright suggests you prepare to hear on a cable channel near you soon that value is dead and long live growth. Shortly thereafter the battle cry will be picked up by lemmings across the financial medium spectrum. At that point it is a lay-up that capital will begin to move from quality. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The bottom line is Wright and his team’s Undervalued sector will definitely be the beneficiary of capital movement. In the meantime while we patiently wait for events to unfold just keep compounding those dividends. Stock Updates ConAgra (NYSE: CAG) is the company behind many of America’s favorite food products. Their massive brandings even include Butterball, a favorite choice of many Thanksgiving dinners. After the sale of its fresh beef, pork, chicken, and canned seafood businesses last year, the company began a new focus on its successful higher margin products. With its new set of assets, the company currently organizes itself into three business segments, known respectively as Retail Products, Foodservice Products, and Food Ingredients. The close for the fourth quarter brought news of gross declines for ConAgra. Net income for the quarter fell to only $0.20 per share as compared to $0.32 per share during the previous year. Earnings also fell a corresponding 40%. Results were partly impacted by loss of contribution from the company’s fresh meat operations, which were recently sold. The company’s outlook for 2006 called for increased earnings per share, with impaired growth during the first quarter. Margin problems, which have proven to be a source of continuing difficulty for the company are still being addressed through downsizing, reorganization, and consolidation. At a recent price of $23, ConAgra remains in a Declining Trend. Though offering a 4.7% yield, the company historically will decline to the point at which investors could find a higher 6.0%. Recent problems with earnings, and the announcement of a class-action lawsuit may help to bring the negative pressure necessary for a complete decline to Undervalue. In the near-term there is no expectation that margin pressures caused by rising prices in raw ingredients will soon let up. Investors should certainly find value in the company’s current yield, but those looking for the best prices will ultimately have their patience rewarded with lower downside risk. Based on the company’s current dividend, it is expected to return to Undervalue at a price of $20. LSI Industries (NASDAQ: LYTS) was founded in 1976 as a provider of lighting systems to the petroleum and convenience store markets. Over the last several decades the company has diversified into several areas of the commercial image business and grown its lighting product lines. From its headquarters in Cincinnati, LSI divides its operations into two major segments: lighting and graphics. During the third quarter of fiscal 2005, LYTS reported strong growth in sales which marked an increase of 32% from the figures realized during the previous year. Net income jumped a corresponding 163% to $0.12 per share, compared to the $0.05 per share reported last year. The petroleum and convenience store markets continued to represent 21% and 27% of net sales in the third quarter. Notably the company also announced its $0.10/share dividend which was payable in May. Since the company began paying a regular dividend in 1989, the rate has been increased a total of 12 times. At a recent price of LSI Industries remains Undervalued. Over recent years management has made a strong effort to reward shareholders with several dividend increases. Operations are run responsible with very little debt and quick attention to changing market conditions. Recent run ups in price have pierced previous highs and may be a sign that the company is finally gaining broader recognition. Notably it is followed by very few analysts, making it a gem that has slipped under the radar of the broader market and provided Wright and his team’s readers with large gains. Investors acquiring shares at current levels should expect share price to possibly fluctuate downward merely as a necessary reaction to current drastic gains. In the meantime a 2.7% yield provides an enticing reward to stick with this no debt, “G” for growth company. Investment Quality Trends is the #1 performing newsletter on a risk-adjusted basis for the past 15 years -- through 1/31/2001 according to industry watchdog, Mark Hulbert, who ranks the top performers in the investment newsletter industry. Find out why we’re #1. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - b) Stocks are Sizzling this Summer Jim Collins says the stock market is in reasonably good shape. Learn about some of his Buy List stocks. More... c) Hot List Continues to Trump the Market John Reese’s Validea Hot List continues to outperform the market. Learn about some of the holdings. More... Dennis Slothower says the Fed is stuck between a rock and an oil barrel. He also highlights some stocks. More... Donald Rowe will wait until this correction bottoms so he can average up when he buys. More... f) Valero Prospers in the New Era in Refining Charles Norton & Allen Gillespie say Valero Energy is converting opportunities into profits. More... Featured Expert articles are courtesy of the 60+ leading investment newsletters that have partnered with us to create the Zacks Expert Advice service. Check out the Experts section of Zacks.com daily to find profitable stock picks and timely market commentary at: http://at.zacks.com/?id=1340.
2. BEST OF ZACKS EQUITY RESEARCH Zacks.com offers three unique weekly commentaries that all further
our mission to help you Profit from the Pros. Today's
commentary is the Earnings & Sector Update from Nick Raich,
Director of Research for Zacks. His weekly article explores
the important trends in recent and upcoming earnings data. This
report is a must for any investor seeking to buy into the
hottest industry sectors and avoid those out of favor. See
the full report at: http://at.zacks.com/?id=1363. Earnings & Sector Update Second quarter earnings season is starting to wind down. Once again, it was another good quarter as the average company in the S&P 500 grew its earnings by 16% from last year’s second quarter. The expectation for the companies that have reported was for 11% earnings growth. When all S&P 500 companies eventually report, we now expect final 2005 second quarter earnings growth of 14%, which is at the high end of our range forecasted at the beginning of the quarter. Final second quarter results will mark the 12th consecutive quarter of double-digit profit growth for the S&P 500. This streak is expected to continue into the third and fourth quarters. The Energy, Industrials, and Telecom sectors posted the most positive surprises. These sectors have also beaten their earnings estimates by the widest margins. The Materials sector had the most negative surprises and has the most negative earnings estimate revisions over the past 30 days. It remains our view that second half 2005 earnings growth estimates appear too high. But, there has been no concrete evidence earnings estimates are getting cut. In fact, consensus growth estimates have actually increased, led by very positive earnings estimate revisions in the Energy sector. More at: http://at.zacks.com/?id=1363. Table of Contents for Rest of the Report
Click here to read this weeks` full report. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - BULL OF THE DAY Chemed Corp. (CHE) - Market-Leading Hospice Division. For full Zacks research report, click here. Enersis S.A., ADR (ENI) - South American Energy Difficulties. For full Zacks research report, click here. Yahoo Underperforms Expectations Riding the Rails
3. PROFIT TRACKS Zacks.com is proud to share with you some of the best trading
strategies that truly allow you to Profit from the Pros. Today
we highlight... Profit Tracks: Recent Price Strength This Profit Track provides an attractive shorter term trading strategy for those who want a stocks price momentum to be in their favor. Then just to be sure, we also want the fundamentals to be sound as well. The end result is a strategy that has generated an average annual return of 48.1% over the past four years. The key element in this screen is finding stocks currently on the move and that are trading in the upper ranges of their 52 weeks highs. Astec Industries Inc. (NASDAQ: ASTE), a construction equipment company, recently reported second-quarter earnings of 49 cents per share, eight cents, or 19% over the consensus. The result topped the year ago result of 31 cents per share. During the past four weeks, ASTE’s share price has increased approximately 28% and is trading right at its 52-week high. Continue your research on ASTE at: http://at.zacks.com/?id=1996. Champion Enterprises Inc. (NYSE: CHB) a manufactured housing company, has gone up in price by almost 27% over the past four weeks and is trading at a 52-week high. In July, the company announced second-quarter earnings of 18 cents per share, beating the consensus estimate by four cents, or 28%. The company noted that increasing margins contributed to its bottom line. Continue your research on CHB at: http://at.zacks.com/?id=1997. American Ecology Corp. (NASDAQ: ECOL), a waste management company, recently reported a strong earnings report. Second-quarter earnings were 21 cents per share, ahead of the consensus estimate by 16%. Given this positive momentum in earnings, it is not surprising that shares of ECOL are trading near its 52-week high and have advanced in price by about 3% over the past four weeks. Continue your research on ECOL at: http://at.zacks.com/?id=1998. Stewart Information Services, Corp. (NYSE: STC), a real estate and transaction management company, recently delivered a very strong second-quarter report. Earnings surged to $2.04, 88 cents above the consensus. Revenues reached a record level of $651 million. This Zacks #1 Rank stock is up over 11% during the past four weeks and is trading just shy of a 52-week high. Continue your research on STC at: http://at.zacks.com/?id=2016. To see the full list of stocks that currently pass this winning screen, go to: http://at.zacks.com/?id=1999. All the Profit Track strategies were created and backtested using the Research Wizard software from Zacks Investment Research. If you like this screening strategy, but want to narrow down the list of stocks and even improve the performance, then you should start a free trial to this powerful stock picking tool. Learn more about the Research Wizard free trial offer and our new special report “Top 10 Stock Screening Strategies” at: http://at.zacks.com/?id=1993 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The Difference Between Good Stocks and Great Stocks Kevin Matras goes over two Screening Strategies that go beyond your ordinary Earnings screens. http://at.zacks.com/?id=1474. 4. ZACKS #1 and #5 ADDITIONS Zacks.com is proud to share with you some of the best trading
strategies that truly allow you to Profit from the Pros. Today
we highlight: Zacks Rank #1 and #5 Additions The Zacks Rank is a powerful stock indicator whose #1 Strong Buy stocks have risen by an average annual return of 32.8% since 1988 versus 11.9% for S&P 500. And just as important, it tells you which stocks to sell now (Zacks #5). Since 1988 the S&P 500 has outperformed the Zacks #5 Rank Strong Sells by 155.5% annually (11.88% vs. 4.65% respectively). Learn more about the Zacks Rank following this section. Below you will find all the stocks added to the Zacks #1 and #5 Rank lists this week.
More. . .
Zacks #1 Rank List continued...
To see the full list of Zacks #1 Ranked stocks (approx. 200 stocks), then click here. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Zacks #5 Ranked List: 64 New Additions (alpha by ticker)
More. . .
Zacks #5 Rank List continued...
To see the full list of Zacks #5 Ranked stocks (approx. 200 stocks), then click here. 5. OPTIONS CENTER Zacks has partnered with the leading options experts,
Schaeffer's Investment Research, to provide you the best options
commentary, research, and trading tools on the market today. Read below more on Schaeffers Tools to Profit with Options. This week I want to take a look at the Unusually High Option Volume filter. The last time we looked at this filter we determined that American Insurance Group (AIG) looked like a nice bearish play, but so far it really hasn’t done much. Still, let’s not forget the huge winner that we saw on Beazer Homes USA (BZH) thanks to the Put/Call Ratio over 1.0 filter - proving these filters can work if you use them right. With that said, let’s try and pick a winner. The nice thing about this filter is that you can look at both the most active calls and puts from the previous day's action. What can you garner from this, you might ask? Well, to answer that question, let's take a step back to describe our Methodology here at Schaeffer's Investment Research. In short, we are contrarians. The simplest way to put it is that we look for stocks that are trending higher amid a sea of skepticism. We view this as a sign that money is left on the sidelines just waiting to come in and push the shares higher. Obviously, bearish plays are vice-versa - optimism toward an underperformer. With the market rallying like it has the past few months we've been more comfortable playing bullish calls, by using these filters, but today let's mix things up and look for a bearish put. When it comes to the Unusually High Option Volume filter we look at it everyday to see if any name stands out as a potential play. Filtering for a bearish play, means we like to see lots of bullish call activity. Remember, we are contrarians, and that means that we want to bet against the crowd. Looking at the list from Wednesday, August 3, one name that stood out was Microsoft (MSFT). As Bernie Schaeffer has pointed out numerous times on our website, SchaeffersResearch.com, he is bearish on the larger named tech stocks like MSFT, whereas he sees opportunity coming from the small caps. Back to the list, we see that MSFT had more calls trade on it last Wednesday than any other stock in the universe. According to the data, a total of 131,490 bullish calls traded on MSFT, which is about three times the average daily call volume. So far everything lines up; still let’s look at some other aspects of our methodology before we trade anything. When it comes to media sentiment, you don’t have to follow the markets much to know that MSFT is a media darling. Now, a novice trader might think that is good news, but actually too much optimism shows us that just about everyone who wants to own the shares probably already has bought – leaving the door open for some selling pressure. The major question now is does the price action deserve this type of optimism? I sure don’t think so. In fact, MSFT is trading right at about the same level it was back in April 2002 – over three years ago! So let’s get this straight, the stock has done nothing over three years, yet the media loves it? The short answer is a resounding YES, the price action does deserve this type of optimism. We also like to see what the analysts think to get a better gauge of overall sentiment. Despite this poor price action, investors remain optimistic toward MSFT. Remember, this is exactly what we want to see, as it shows more bullishness toward the underperforming shares. According to Zacks, 22 of the 23 covering analysts rate the shares a "buy" or better. This greatly increases the odds of some downgrades should the shares begin to sink, yet again. Overall, the%age of "buys," "sells," and "holds" is pretty skewed to the bullish camp. Another area we like to look at is how many short sellers are betting against the shares. As it turns out, short interest declined by more than 28% last period, leaving investors with less than one day to cover the 60 million MSFT shares sold short. This lack of short covering support indicates that the security is vulnerable to an accelerated downside move should MSFT come under selling pressure. Once again, looking at the open interest, we see there is a huge amount of bullish calls at the $27.50 strike. Without getting too technical here, we use these high levels of open interest at a strike above the current price as potential resistance. It has to do with the market makers and the way they are hedged. We’ll just leave it at that, as the bottom line is; lots of calls overhead can serve as resistance. Finally, this combination of bullish sentiment and long-term technical weakness has earned MSFT a Schaeffer's Gold Equity Scorecard rating of 3.0 out of 10.0, indicating that the path of least resistance is lower. (Schaeffer's Gold Equity Scorecard is an equity evaluation tool found at SchaeffersResearch.com under the propriety section titled Schaeffer's Gold.) So there you have it, after looking at the Unusually High Option Volume filter we have a potentially very nice looking short play. With that said, feel free to paper trade a MSFT put and see how we do. If you feel extra aggressive play a short-term option that will expire in a month or so, or if you’re a little more conservative play something in the money and about six months out. We'll be back next week to take a look at yet another filter. In the mean time, please continue to use all of the filters on these pages and try to find out which one's work best for you. Remember, don't be afraid to paper trade a few here and there, as this is a great way to learn. Finally, options are highly leveraged vehicles, and the odds favor that most of your trades are going to be losers. But, thanks to this high leverage, all it takes are a few winners to make your overall portfolio more than profitable. Keep on using the filters and good luck with your trading! To learn more about the Unusually High Option Volume filter, click here. Discover all the tools and commentary available from the Zacks.com Options Center at: http://at.zacks.com/?id=614. OTHER TOOLS FROM ZACKS At the heart of Zacks Investment Research is the Zacks Rank investment philosophy that continues to vastly outperform the market. Our Zacks #1 Ranked (Strong Buys) have produced the following results for investors:
And just as importantly, the Zacks #5 Rank stocks (Strong Sell) List has alerted investors as to which stocks to dump from Their portfolios to avoid unnecessary losses. To truly take advantage of the Zacks Rank, you need to first understand how it works. That's why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. Download a free copy now to prosper in the years to come by visiting: http://at.zacks.com/?id=1346. Or view the full list of Zacks #1 Ranked stocks at: http://at.zacks.com/?id=1353. FREE PORTFOLIO TRACKER Do you believe that these events affect stock prices?
If you answered yes, then how are you staying on top of these changes for your stocks? If you are one of the 45,000 investors who wake up every morning to the Daily Portfolio Updates emails from Zacks.com, then you are all set. If not, then sign up now to get this vital information sent to you daily and improve your portfolio's performance. Did we mention it's free? Get started now by going to: http://at.zacks.com/?id=1674 We hope you enjoyed this issue of "Profit from the Pros", And we look forward to visiting with you again next week. REFER-A-FRIEND If you enjoy this e-mail newsletter, then please pass it along to a friend. Simply forward them the link below to sign up for their own free subscription. If you're reading a forwarded copy, sign up for your own, so you get this wealth of information every week. Just click here. THANKS! Regards and Happy Investing, Stephen Reitmeister p.s. What is the mission for Zacks Profit from the Pros? Click here to find out how we will help you become a more successful investor. *The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor's. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security. To contact us by mail: Zacks Investment Research To unsubscribe from receiving "Profit from the Pros" e-mail newsletter, click here. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
- Latest News
- Most Popular
- 3 Dreamy Small-Cap Stocks
- Correction or Summer Range Trade?
- Hitting Home Runs & Grand Slams, Not Loud Outs
- Hedge Your Portfolio with the Equity Bear ETF
- Machinery Industry Stock Outlook - May 2013
- Determining Correct Position Size with Options
- This Week's Growth & Income Stocks
- RTI: Do Stocks Tank When QE Ends?
- 3 Top-Ranked Consumer ETFs to Buy Now
- AWS 5/23: Is the Market Over-Reacting?
- PFP 5/23: Do No Harm
Recent Quotes
| No Recent Quote currently available |
My Portfolio
|
My Portfolio Tracker One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts. Set yours up today. |
Zacks #1 Stocks on the Move 05/23/2013
| Company Name | Symbol | %Change |
|---|---|---|
| WESTELL TECH | WSTL | 6.67% |
| STEIN MART I | SMRT | 5.38% |
| ALLIANCE FIB | AFOP | 5.21% |
| DAWSON GEOPH | DWSN | 4.33% |
| MARRIOTT VAC | VAC | 3.27% |
Quick Links
Resources
Client Support
Zacks Research is Reported On:
Zacks Investment Research
is an A+ Rated BBB
Accredited Business.
Copyright 2013 Zacks Investment Research
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1986 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1986-2011 and were examined and attested by Baker Tilly, an independent accounting firm.
Visit performance for information about the performance numbers displayed above.
NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.