Monday - November 28, 2005
 Want to view the archive of past issues? Go to: http://at.zacks.com/?id=2314. Manage Profit from the Pros subscription: 1. ZACKS EQUITY RESEARCH As GM takes more rather drastic steps to salvage its once-great company, we can see difficulties within the auto industry on many fronts. To help us make sense of these matters, we spoke with Paul Raman, CFA, our senior analyst covering several companies within the automotive industry. Regarding Monday's news that GM will be slashing jobs and closing plants, do you feel these measures will go a long way toward righting the wrongs that have affected this company? I think that General Motors' (GM) major restructuring moves are only a partial cure for the company. Obviously, the number of plants and employees affected are far higher than expected, which is a plus. However, the core issues - powerful unions, underfunded "legacy" pensions and underfunded healthcare costs - remain very serious problems. Ultimately, I think that GM will not wind up in bankruptcy, but is using this possibility as a bargaining tool with the unions to reduce their pension and healthcare costs. If the unions do not negotiate on these issues, then theoretically GM could file for bankruptcy, and the Bankruptcy Court would more than likely side with GM. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The bankruptcy of Delphi a month and a half ago seems to have triggered GM's recent problems. Are there any danger signs with auto supply companies that might affect other auto makers? The bankruptcy of Delphi was one of many catalysts starting GM's recent woes. This is due to "flowback" issues surrounding GM employees that migrated to Delphi. "Flowback" issues involve pension and healthcare funding for these workers, along with salaries for these workers that are far higher than Delphi's non-unionized workforce. However, this issue will not affect Daimler Chrysler (DCX) and Ford (F). Ford recently negotiated an agreement with Visteon (VC) to avoid a GM-like problem. Daimler Chrysler relies on several suppliers, which minimizes the Delphi-like risk. How do auto sales and pricing look going into the fourth quarter? Auto sales are slowing into the fourth quarter. The end of "Employee Pricing" plans plus rising rates, rising gas prices and a slowing housing market are all hurting the industry. Rising rates make cars more difficult to afford, rising gas prices favors imports over domestics, and a slowing housing market makes refinancing, taking the cash out of a home, and buying a car less likely. Prices are likely to weaken as automakers try to spur sales with incentives. What Buy or Sell recommendations do you have for us today? As far as Sells, I would still steer clear of Delphi (DPHIQ), even at these levels. I think that the residual stock will be worth $0, as equity holders are left with no value in the company. In other words, bondholders and creditors will own the company after the reorganization, much like another company that this just happened to, Intermet. Looking forward through fiscal 2005 into the first quarter 2006, what can investors expect from companies in the auto industry? Auto companies are likely to track the market. Fundamentals will be tough, but valuations are at levels where there is little downside (valuations near accounting book value, high dividend yields, etc.) Hence, the stocks will tread water over the next several months, in our opinion. Paul Raman, CFA is a senior analyst covering the automotive industry for Zacks Independent Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - BULL OF THE DAY Infosys, ADS (INFY) - Growth in Indian IT. For full Zacks research report, click here. Merck & Co. (MRK) - Key Drug Sales to Decline. For full Zacks research report, click here. More Than Microsoft Energy Sector Impacted by Lower Oil Prices
2. 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. AZZ incorporated (NYSE: AZZ), a manufacturer of electrical products and a provider of galvanizing services, announced fiscal second-quarter earnings of 24 cents per share in mid-October. The result eclipsed last year’s 16 cents. The company commented that quotation activity and incoming orders in its Electrical and Industrial Products Segment were at an improved level, both domestically and internationally. AZZ has low levels of debt as evidenced by its debt/equity level of .26 and a current ratio of 1.95. Continue your research on AZZ at: http://at.zacks.com/?id=2254. Bluegreen Corp. (NYSE: BXG), a leading provider of leisure products and lifestyle choices, reported third-quarter earnings of 60 cents per share earlier this month. The result outpaced the previous year’s 54 cents and exceeded the consensus estimate by approximately 11%. Total sales increased to $166.8 million from $161.9 million year-over-year. The company sports a PEG ratio of .71 and a price/sales multiple of .75. Continue your research on BXG at: http://at.zacks.com/?id=2255. JAKKS Pacific, Inc. (NASDAQ: JAKK), a Zacks #1 Rank (Strong Buy), has a debt/equity level of .19 and a current ratio of 2.59. In mid-October, the company posted third-quarter earnings of $1.05 per share. The result surpassed the consensus estimate by about 19% and outperformed last year's earnings. JAKK’s net sales grew from last year’s third-quarter total of $206.1 million to $233.5 million. Continue your research on JAKK at: http://at.zacks.com/?id=2256. Reliance Steel and Aluminum Co. (NYSE: RS), another Zacks #1 Rank (Strong Buy), meets the criteria of this profit track with its current ratio of 2.68 and a debt/equity level of .38. In mid-October, the company released third-quarter earnings of $1.49 per share versus $1.35 for the year prior. The result was also ahead of the consensus estimate by approximately 19%. The company said its products sold into the aerospace industry continued to show strength during the quarter. Continue your research on RS at: http://at.zacks.com/?id=2257. To see the full list of stocks that currently pass this winning screen, go to: http://at.zacks.com/?id=2258. 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=2307 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Kevin Matras shows you why stocks with new analyst coverage are stocks you want to have: http://at.zacks.com/?id=2259. 3. ZACKS #1 RANK STOCKS The Zacks #1 Rank (Strong Buy) list is always limited to approximately 220 stocks. Four stocks that are currently included in this elite group are: Advent Software, Broadcom Corporation, Ingram Micro and Macromedia. Advent Software, Inc. (NASDAQ: ADVS) announced third-quarter earnings of 19 cents per share in mid-October, soaring past the consensus estimate by nearly 138% and reversing last year’s loss. The company commented that, among other positives, it saw continued revenue growth and its third consecutive quarter of positive earnings per share. Earnings estimates for the year ending December 2005 are above one month ago levels by 10 cents, or about 32%. Continue your research on ADVS at: http://at.zacks.com/?id=2262. Broadcom Corp. (NASDAQ: BRCM) released unaudited third-quarter pro forma non-GAAP earnings of 39 cents per share in mid-October, outpacing last year’s 36 cents and topping the consensus estimate by almost 3%. The company noted that its revenue and net income reached record levels in the third quarter, driven by continued broad-based strength within its major target end markets. Earnings estimates for the year ending December 2005 climbed seven cents, or approximately 5% over the past 30 trading days. Continue your research on BRCM: http://at.zacks.com/?id=2263.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Ingram Micro Inc. (NYSE: IM) recently posted third-quarter non-GAAP earnings of 36 cents per share, beating last year's 21 cents and jumping ahead of the consensus estimate by roughly 16%. The company stated that over the last eight quarters it has consistently delivered solid sales growth, and this quarter IM drove much of it to the bottom line. The company issued a fourth-quarter earnings guidance of 47 cents to 50 cents. Current Wall Street estimates are 48 cents per share, which is almost 7%, more than the forecast of one month prior. Continue your research on IM at: http://at.zacks.com/?id=2264. Macromedia, Inc. (NASDAQ: MACR) released fiscal second-quarter non-GAAP earnings of 30 cents per share in late October, eclipsing last year’s 22 cents and beating the consensus estimate by 25%. The company noted that with the advancement of rich Internet application development, new mobile adoption on the Flash Platform, and the launch of Studio 8, this has been an outstanding quarter. Earnings estimates for the year ending March 2006 climbed 10 cents, or about 9%, over the past 30 trading days. Continue your research on MACR at: http://at.zacks.com/?id=2265. To see the full list of Zacks #1 Rank stocks (approximately 220 stocks), go to http://at.zacks.com/?id=2266. The Zacks Rank is a powerful stock indicator whose #1 Strong Buy stocks have risen by an average annual return of 33% since 1988 versus 11.8% for S&P 500. To help you fully understand how the Zacks Rank works and, more importantly, how you can profit by using the Zacks Rank, we have created a free report - The Zacks Rank - Harnessing the Power of Earnings Estimate Revisions. This valuable information is available at: http://at.zacks.com/?id=2267. 4. FEATURED EXPERTS Here we cast the spotlight on a timely Featured Expert commentary that recently appeared on Zacks.com.
An overwhelming number of positive earnings reports during the past week, as well as lower energy prices, have given stocks the momentum to sustain their recent rally. The Nasdaq Composite and the Dow Jones Industrial Average led the way with returns of 1.5%. The S&P 500 followed closely behind with a very good 1.2% return. With most of the S&P 500 having reported earnings, nearly two-thirds have exceeded expectations. High-profile consumer giant Wal-Mart followed this trend today when it reported better-than-expected third quarter results on strong sales. Clearly, the economy is on solid footing heading into the fourth quarter and consumers have not stopped spending despite higher energy prices. The major stock indexes have not budged for a long time, while earnings have continued to grow. This has left valuations at multi-year lows. As long as inflation remains under control, stocks should do well in the months ahead. Hansen Natural (NASDAQ: HANS) is a holding company and carries on no operating business except through its direct wholly-owned subsidiaries, Hansen Beverage Company and Hard e Beverage Company. Hansen is engaged in the business of marketing, selling and distributing so-called alternative beverage category, such as natural sodas, fruit juices, juice cocktails. United Therapeutics (NASDAQ: UTHR) is a biotechnology company focused on combating cardiovascular, inflammatory, and infectious diseases with unique therapeutic products. These products include pharmaceuticals, arginine products and telemedicine services. Urban Outfitters (NASDAQ: URBN) announced record results Thursday for the three months ended October 31. Net earnings jumped by 43% over the comparable quarter last year to $37.2 million. Third quarter earnings per share rose to $0.22 versus $0.15 in the prior year. Fueling this increase was a 13% jump in comparable store sales. Building Materials Holding Corporation (NASDAQ: BMHC) has entered into a definitive agreement to acquire the business assets of the Home Lumber division of Leaman Building Materials. Home Lumber, which had sales of approximately $61 million last year, provides lumber, building materials and millwork to professional contractors and builders from its three locations in the Houston market. This acquisition of Home Lumber is another step in Building Materials` strategy of providing a full range of building materials and services in key homebuilding markets such as Houston, which is one of the top five markets in the country. True Religion Apparel (NASDAQ: TRLG) released its fiscal third quarter results on Thursday. For the period ended September 30, net sales increased to $35.0 million compared to $7.4 million in the same quarter a year ago. Net income increased to $7.7 million, or $0.33 per share, compared to the year-ago level of $954,000, or $0.05 per share. The company’s results were three cents above its previously raised guidance of $0.29 to $0.30 per share issued on October 11. OTC Insight® specializes in growth stocks, particularly in the small to mid-cap range. This monthly publication, which focuses on Nasdaq listed stocks, is a by-product of the research we use to select stocks for our managed client portfolios through Insight Capital Research and Management, Inc.® http://at.zacks.com/?id=2399. 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=2309. Or view the full list of Zacks #1 Ranked stocks at: http://at.zacks.com/?id=2266. 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=2310 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, Charles Rotblut, CFA 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 05/17/2013
| Company Name | Symbol | %Change |
|---|---|---|
| VIASAT INC | VSAT | 19.35% |
| OLD SECOND B | OSBC | 5.76% |
| GAMCO INVEST | GBL | 4.61% |
| CORNING INC | GLW | 4.47% |
| SYNCHRONOSS | SNCR | 4.23% |
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