Tuesday - August 16, 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.
If you didn’t catch it, the FOMC raised the o/n fed funds rate by 25 bps to 3.50%, and other than some minor rewording – the statement remained virtually the same as the June 30th statement. The highlights are: “Aggregate spending, despite high energy prices, appears to have strengthened since late winter, and labor market conditions continue to improve gradually. Core inflation has been relatively low in recent months and longer-term inflation expectations remain well contained, but pressures on inflation have stayed elevated.” But more importantly, and certainly along the lines Richard Rhodes and his team have noted in this report time and time again – interest rates are headed higher…perhaps higher than many believe, but are coming around to believing. Just several months ago many thought the FOMC would ‘skip’ a meeting and hold tight and sit and watch, they have not, and what they continue to do without pause is consistently repeat verbatim that “monetary policy remains accommodative;” that “accommodation can be removed at a pace that is likely to be measured;” and that “with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal.” Rhodes and his team fear this will go on until the economy begins to show real stresses…and they will have overstayed their welcome once again. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ExxonMobil’s (NYSE: XOM) principal business is energy, involving exploration for, and production of, crude oil and natural gas, manufacturing of petroleum products and transportation and sale of crude oil, natural gas and petroleum products. Exxon Mobil is a major manufacturer and marketer of basic petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a wide variety of specialty products. Exxon Mobil is engaged in exploration for, and mining and sale of coal, copper and other minerals. Input/Output (NYSE: IO) is a leading designer and manufacturer of seismic data acquisition systems and related products used on land, in transition zones and in marine environments. The Company's data acquisition products are particularly well suited for advanced three-dimensional data collection techniques. Seismic data is used extensively in the oil and gas industry as an exploration risk management tool and is also increasingly employed in field development and reservoir management activities. Atwood Oceanics (NYSE: ATW) is engaged in contract drilling of exploratory and development oil and gas wells in offshore areas and related support, management and consulting services. The company also provides labor, supervisory and consulting services to operator owned platform rigs. Most of the company's drilling operations are conducted outside United States waters. The Rhodes Report offers unique and insightful daily perspectives into the US capital markets. At times, our assertions and recommendations are bold and out of consensus – which is very different from today’s brokerage house research. In fact, many of our clients don’t necessarily agree with everything in our reports, but they find the services stimulating as a source of ideas and useful as a confirmation or critique of their own viewpoints. http://at.zacks.com/?id=1690. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Nadine Wong says Discovery Labs has significant potential in treating respiratory diseases. More... Ian Wyatt discusses the second-quarter earnings of two Internet companies and a firm that provides laser eye surgery technology. More... Walter Frank says rising interest rates will influence stock prices. Learn how and read a mutual fund profile. More... John Reese highlights recent economic activity, including the impact of the Fed on credit card and business loans. 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 Over 90% of the companies in the S&P 500 have released second quarter earnings. It was another good quarter for earnings. The average company in the S&P 500 grew its earnings by 15% from last year’s second quarter. The expectation for the companies that have reported was for 10% earnings growth. When all S&P 500 companies eventually report, we 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, where Zacks consensus earnings estimates are for 16% and 15% growth respectively. The Energy, Industrials, and Telecom sectors posted the most positive surprises in the second quarter. These sectors also beat their earnings estimates by the widest margins. The Materials sector had the most negative surprises and has also had the most negative earnings estimate revisions over the past 30 days. In addition, the Consumer Staples sector has seen its fair share of negative earnings estimate revisions as well. It remains our view that second half 2005 earnings growth estimates appear too high. However, there has been no concrete evidence earnings estimates are getting cut. In fact, consensus growth estimates have actually increased over the past 30 days, led by very positive earnings estimate revisions in the Energy sector. Furthermore, current company guidance has also been positive. Across our entire Zacks universe of over 8,000 companies, we have seen 1.1 companies raising second half earnings estimates for every company lowering them. This is a very positive sign for second half earnings. Although, we point out that peak third quarter preannouncement season will not be until mid-September. At that time, we will closely monitor the guidance, especially with oil prices approaching $70 a barrel. 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 Commerce Bancorp (CBH) - Entering Florida Market. For full Zacks research report, click here. Apartment Investment (AIV) - Lowering Guidance. For full Zacks research report, click here. Medical Devices Target Aesthetics Making a Clear Connection
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: Discounted Fundamental Strength Fundamental strength is often a key criterion for many investors. A strong balance sheet and a history of profitability indicate that a company has the ability to meet its obligations and the flexibility to pursue opportunities for growth. Therefore, such stocks are often perceived as having a lower level of risk. The lower level of risk often results in higher valuations. Occasionally, however, the markets undervalue a stock relative to its company’s fundamental strength. When this occurs, opportunities for profits are created. This Profit Track identifies such opportunities. Backtesting results show just how successful this Profit Track has been. Double-digit returns have been achieved during each of the past four years. In 2005, this strategy continues to handedly beat the S&P 500. Ashland, Inc. (NYSE: ASH) recently reported fiscal third-quarter earnings that were approximately 11% ahead of the consensus estimate. The company noted that both the Chemical and Transportation Construction Sectors reported higher profits due mainly to improving margins. ASH has a current ratio of 2.61, indicating that it is more than able to meet all of its short-term obligations. Value investors may find this stock attractive with its price/sales multiple of .46 and PEG ratio of .75. Continue your research on ASH at: http://at.zacks.com/?id=1996. CNA Financial Corp. (NYSE: CNA) has an appealing PEG ratio of .76. The company recently released second-quarter financial results, which included earnings per share that improved year-over-year and matched the consensus estimate. CNA has little debt and is in a position to prosper in the future as evidenced by its debt/equity level of .19. The insurance holding company also satisfies this profit track with its current ratio of 3.03. Continue your research on CNA at: http://at.zacks.com/?id=1997. Earthlink, Inc. (NASDAQ: ELNK) has no debt as indicated by its debt/equity ratio of zero. The company also sports an attractive valuation with a PEG ratio .46 and price/sales multiple of .93. The company said the second quarter saw strong financial results, driven by management's focus on operational excellence and its continuing commitment to long-term shareholder value. Earnings per share for the quarter topped the consensus estimate. Continue your research on ELNK at: http://at.zacks.com/?id=1998. Reliance Steel and Aluminum Co. (NYSE: RS) is a Zacks #1 Rank (Strong Buy) company with strong fundamentals and low valuations as evidenced by its current ratio of 2.75, as well as its PEG ratio of .26 and price/sales multiple of .51. This company, one of the largest metals service center companies in the United States, also exceeded analysts’ expectations for the second quarter. With earnings per share of $1.48, RS was about 24% ahead of the consensus. Continue your research on RS 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 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Price Targets and 'Multiple' Expansion Kevin Matras shows you how you can create your own price targets and how to estimate your stocks' future earnings multiple: 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: 66 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. The filters strike once again! A few weeks back I wrote a follow-up to the June 27, 2005 observation where we felt it was a good time to go long with Beazer Homes USA (BZH). Had you listened, you could have profited to the tune of over 120% on the BZH November 50 call (BZHKJ) that we focused on for $8.00 per contract. Well, lightening must have struck twice, because back on July 25, 2005 we wrote bearishly on Cisco Systems (CSCO) and just last week the shares announced earnings that upset the Street a little bit, and the shares took a huge hit. In my first blurb on CSCO, I suggested following a January 2006 20 put (CYQMD) for $1.40 per contract. Well, just a few weeks later that same put was trading at $2.35 a contract, for a nice little gain of 67%. Now that might sound nice, but keep in mind that is playing an option that is nearly half a year away from expiring. Just imagine had you played a more aggressive option to truly profit from the leverage that options provide. A few hundred percent return isn’t out of the question and this is what makes trading options so much fun. One of the best exercises you can do is review why you got into a trade, both winners and losers. For the rest of this blurb lets once again take a look at what it was that we liked about CSCO bearishly back on July 25. Please read this carefully, as you might notice something that is a little different or might help you going forward with your own trading. Using the High Open Interest Call filter we were able to spot CSCO and this is what we want to examine. But before we can go any further, let’s talk briefly about our methodology here at Schaeffer's. We are contrarian-based investors, meaning that we want to see skepticism toward an outperformer as a sign that money is still on the sidelines. Conversely, we want to see optimism toward an underperformer. We view too much optimism as a potential sign that nearly everyone who wants to invest in a particular stock already has. Now, just because a stock has lots of optimism doesn't mean that we will blindly short a particular security; we need to see some negative price action or a major catalyst for a downside move in order to pull the trigger in most cases. Other indicators that we tend to utilize in measuring overall sentiment include put/call ratios, short interest, magazine cover stories, media comments, and analyst ratings. One more very important item that we must touch upon regarding this filter before we get started is that the majority of the stocks it suggests are likely to be the big names that have lots of activity, such as the Nasdaq 100-Trust (QQQQ) , the Spyders (SPY) , or Microsoft (MSFT). These big names don't take away from the importance of this filter; they are just something to keep in mind. Scanning the list from last Wednesday, July 20, 2005 one name that we noticed was Cisco Systems (CSCO). This particular equity made the list thanks to the heavy open interest at both the August and October 20 calls (CYQHD and CYQJD). When you notice a stock making the list at the same strike with two different months, this is a good sign that this level could be pretty significant. If you've read our website much during the past few months, then you know that Bernie has been nailing home the fact that he is bullish on the under-loved small caps and bearish the much-hyped mega-cap blue chip names. Now, is CSCO your classic blue chip? Probably not, but it is close. However, the company surly isn't a small cap. Let's take a look at the price action and overall sentiment to see if this trade really lines up according to our methodology. With the shares currently just below 20, it will be tough to get much higher thanks to all those calls just above current levels. During the past 12 months, CSCO has declined 8% - not exactly stellar performance. Also, it turns out that the 80-week moving average is just above current levels. The 80-week moving average is one that Bernie is very keen on as a trendline for potential support/resistance. I must say that it's growing on me, as it tends to pop-up and work more often than not. Since the beginning of 2004, CSCO has greatly underperformed the broader market, as represented by the S&P 500 Index (SPX). Remember, if you're going to play a put, you'll more often than not want to play an underperforming stock for continued weakness (this of course depends on the aggressive nature of the trader). With the potential for some technical weakness, we now need to look at the equity's sentiment for indications of positive or negative feel. One such indicator we like to use is the level of short interest. If there aren't many investors shorting the shares, then CSCO chances for a short-covering rally are very slim. And, as a matter of fact, it would take less than one day to cover all of the CSCO shares sold short. This figure, my friends, is far from a considerable amount of short interest and confirms that the short-selling crowd isn't making many bets against the shares. Another area we like to look at is Wall Street. According to Zacks, analysts on the Street have issued 22 "buys," eight "holds," and no "sell" ratings. Again, this indicates more optimism toward the security. Furthermore, with that many "buys," CSCO has plenty of room for some downgrades should the shares continue to lag the overall market. With all of that said, let's play the January 2006 20 put (CYQMD) for $1.40 per contract (where it was trading at the time of the original article). So there you go, the exact reasons why we thought CSCO was a good short back then and why. It feels good when they work and this one did big time, so study it closely to try to find out why and why this same set-up will probably work again in the future. In conclusion, please continue to use all of the filters on these pages for more money-making ideas, visit us at SchaeffersResearch.com, and don't be afraid to make a few paper trades to see what strategy works best for you. But please remember that when it comes to options, the majority of your trades are going to be losers. Don't get discouraged, because that's the beauty of the leverage that options provide. It takes only a few winners out of every 10 trades to make you a very happy investor. Good luck! To learn more about the High Open Interest 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Zacks #1 Stocks on the Move 05/22/2013
| Company Name | Symbol | %Change |
|---|---|---|
| ALLIANCE FIB | AFOP | 10.52% |
| SONIC FOUNDR | SOFO | 8.21% |
| TRI TECH HOL | TRIT | 6.63% |
| NOAH HOLDING | NOAH | 6.31% |
| A M R CP | AAMRQ | 5.46% |
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