Tuesday - March 21, 2006
 Want to view the archive of past issues? Go to: http://at.zacks.com/?id=2372. Manage Profit from the Pros subscription: 1. ZACKS EQUITY RESEARCH Talk about March Madness! The major indexes were trading on Friday at levels not seen since the spring of 2001. Much of the earnings news was positive and the economic data released last week did not further fuel inflation worries, thereby providing a backdrop for buying pressure. Although it is certainly more fun to discuss the markets when prices are rising, nothing has materially changed from two weeks ago (when I described the market as range-bound). Companies are enjoying pricing power. The economy is expanding. Crude prices remain at very elevated levels. And the Fed may not end its streak of hiking interest rates at its March meeting. In other words, the equity markets still have to climb a wall of worry. Nonetheless, corporate profits are projected to rise this year and next year. In an environment with controlled inflation, higher profits should translate into higher stock prices. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Speaking of higher stock prices, shares of Corning (GLW) have more than doubled in value over the past 12 months. Although the stock’s valuation is high, estimates for future earnings growth continue to be revised upwards. Forecasts for 2006 profits have been boosted twice within the past 30 days, causing the consensus estimate to rise to $1.02 per share. Behind most recent revisions were bullish comments from the company. Corning’s CFO James Flaws recently revised his forecasts for LCD TV penetration to 18%-19% this year and 28%-30% next year; his previous forecasts called for penetration rates of 17% and 25%. Corning is a large supplier of glass substrates for LCD screens. GLW is one of four stocks helping the Fiber Optics group to have a Zacks Industry Rank of 2.40. Finisar (FNSR), Oplink Communications (OPLK) and Sycamore Networks (SCMR) all are either Zacks #1 or Zacks #2 Rank stocks. Spending on network equipment continues to improve, providing both revenue and profit growth for companies operating in this sector. The increased investment reflects both improving economic conditions and a more competitive telecommunications environment. When there are similar, external reasons for estimates to be revised for multiple companies within an industry group, often other related groups benefit as well. In the case of telecom and network spending, Wire & Cable Products companies have also been beneficiaries. This group has a Zacks Industry Rank of 2.88 and contains two Zacks #1 Rank stocks - Encore Cable (WIRE) and General Cable (BGC). Oil has been another sector with multiple groups benefiting from favorable conditions, as is evident by the strength in Oil & Gas-Canadian Integrated. Three of the five stocks within this group have a Zacks Rank of either #1 or #2. Over the past two months, analysts have raised their 2006 forecasts on Imperial Oil (IMO), Nexen (NXY) and Suncor Energy (SU). These companies, like many others in the Energy sector, have enjoyed strong margins as a result of higher commodity prices. Plus, both IMO and SU expect production volumes to increase in the future. Investors may want to note that Zacks Equity Research analyst Shiraz Mian recently upgraded Suncor from a hold to a buy. (The Zacks Rank applies to periods of 1-3 months, whereas Zacks Equity Research ratings reflect holding periods of six months or longer.) Charles Rotblut, CFA is a senior market analyst for Zacks.com. Read the complete Industry Outlook at: http://at.zacks.com/?id=2379. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog - NEW! Get real-time market insights from Zacks Equity Research Analysts. To see their latest posts, click here. National Semiconductor (NSM) - Strong Q3 Results. For full Zacks research report, click here. Neurocrine Biosciences (NBIX) - Expensive Stock. For full Zacks research report, click here. Satellite Radio Subscriber Growth Boosted Estimate Revisions Positive for both 2006 and 2007
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: Recent Price Strength This screen looks for stocks trading in the upper range of their 52-week highs along with attractive Zacks Rank and Broker Ratings. This strategy proves that the "trend is your friend" with a +35.5% return versus +4.9% for the S&P 500 in 2005. Benihana Inc. (BNHNA), operator of the nation's largest chain of Japanese theme and sushi restaurants, is currently trading very close to its 52-week high. In early February, the company posted fiscal third-quarter earnings of 30 cents per share, beating last year's 20 cents and topping the consensus estimate by about 11%. BNHNA stated that third quarter results primarily reflect gains in comparable sales, continuing the momentum in steadily improving guest counts. Benihana Inc. has seen about 10% growth in its share price over the past four weeks. Continue your research on BNHNA at : http://at.zacks.com/?id=2389. Eagle Materials Inc. (EXP) is a Zacks #1 Rank (Strong Buy) company that produces and distributes Gypsum Wallboard, Cement, Recycled Paperboard and Concrete and Aggregates. In late January, EXP released its fiscal third-quarter report, stating that it remains well positioned to continue to achieve outstanding financial results given its low cost operations, which supply building materials to a strong construction industry. The company also raised its earnings guidance for fiscal 2006. Eagle Materials is currently trading above its 52-week high and has advanced in price by nearly 11% over the past four weeks. Continue your research on EXP at: http://at.zacks.com/?id=2390. Medical Action Industries Inc. (MDCI) is a leading supplier of medical and surgical disposable products. The company's shares are currently trading right at a 52-week high. During the past four weeks, MDCI's share price has increased by about 4%. In late January, the company announced fiscal third-quarter earnings of 30 cents per share, improving on last year's 27 cents and eclipsing the consensus estimate by approximately 7%. MDCI commented that its record operating results reflect the commitment to its balanced sales approach which provided strong growth in minor procedure kits and trays and containment of medical waste product lines. Continue your research on MDCI at: http://at.zacks.com/?id=2391. Meadowbrook Insurance Group, Inc. (MIG) reported fourth-quarter earnings of 16 cents per share in mid-February, surpassing the consensus estimate by almost 7% and exceeding the year-ago result. Revenues increased 7.4% year-over-year. Meadowbrook Insurance Group meets the criteria of this Profit Track with a share price that has experienced nearly 6% growth over the past four weeks and is currently very close to its 52-week high. Continue your research on MIG at : http://at.zacks.com/?id=2392. To see the full list of stocks that currently pass this winning screen, go to: http://at.zacks.com/?id=2393. 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=2394 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Kevin Matras explains why investors should seek out stocks with new analyst coverage: http://at.zacks.com/?id=2395. 3. 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. Last week we went over the performance of our option picks using the filters from December and January. Today we want to get back to using the filters and trying to make some money. In case you hadn’t noticed, numerous indexes across the world have been breaking out to multi-year highs in the past week. This is without question bullish. With that in mind we want to take a look our favorite filter for finding bullish plays – the Put/Call Ratio Over 1.0 (Bullish filter). For a refresher of our methodology, please read on. But if you are already familiar with our methods, please go to the next paragraph. 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 sees substantial optimism doesn't mean that we will blindly short a particular security. In most cases, we need to see some negative price action or a major catalyst for a downside move in order to pull the trigger. 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. Turning to the Put/Call Ratio Over 1.0 (Bullish) filter, the Schaeffer's put/call open interest ratio (SOIR) is simply the number of puts divided by the number of calls among near-term options. That being said, a ratio of 1.0 or greater means that there are more puts than calls in short-term trading. From our contrarian-based approach, we love to see a huge number of puts compared to calls levied against a strong performing stock. If a stock can advance amid heavy bearish sentiment, there is still plenty of money left on the sidelines to help push the stock higher once that crowd begins to turn bullish. Simply because a stock has a high SOIR doesn't mean it is a good long play. But using a SOIR as an indicator is just one aspect of the Expectational Analysis® approach, as we also like to check in on analysts, media, and short interest as other indicators for investor sentiment. If you can find a potential trade that encompasses all of those areas of sentiment, then my friends, you could have a potential winner on your hands. Looking at the list from Thursday one name that looked intriguing to us was retailer Ann Taylor Stores (ANN) – which checked in with a SOIR of 1.07 (6,844 puts compared with 6,416 calls). Now what exactly does this mean? On the surface, not much until you compare it with other readings taken during the past year. Doing this, we find that ANN’s current SOIR is higher than 68 percent of those taken during the past year, suggesting short-term option players are pretty bearish. This is exactly what we want to see. Technically, ANN looks very attractive here, as the shares are near a new all-time high and have potential support from their 50-day moving average just beneath current levels. Let's take a look at some other areas of sentiment that we track before we go out and load up on ANN. The more confident we are about the sentiment being negative amid strong price action, the better the odds are that the trade will work. Two quick and easy things we like to look at to discern this is the equity's short interest and analyst ratings. Shorting selling is where a trader sells shares of an equity that he/she borrowed from a broker with the intention of buying them back at a later date. In other words, you are betting the shares will go down. We love to see lots of shorts betting against a stock because this means that, should the shares continue to advance, those bearish investors will be forced to cover their bets, creating a short-squeeze situation. Turning back to ANN, we find that over 6% of the float is sold short. This buildup is more than enough to spark a short-covering rally on any good news. Now for the analyst ratings. If the brokerage firms are bearish on a stock that is a top performer, it means that the shares could benefit from any positive upgrades. As you might have expected, 10 of the 16 analysts rate the shares a “hold” or less. Showing there’s lots of room for upgrades. Overall, the security has earned a Schaeffer's Equity Scorecard ranking of 7.0 out of 10. This high reading indicates that the shares may still have additional upside ahead of these as this pessimism unwinds in the form of increased buying pressure. Enough said. ANN looks like a great play and we think its time to buy some. As of Thursday afternoon, you could have bought the June 35 calls (ANN FG) for $4.30 a contract. Write this one down and see how it does. From our contrarian point of view, this one looks like a winner. We'll be back next week to take a look at yet another filter. In the meantime, please continue to use all of the filters on these pages and try to find out which ones 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 here and there to be more than profitable. Keep on using the filters and good luck! To learn more about the Put/Call Ratio over 1.0 filter, click here. Discover all the tools and commentary available from the Zacks.com Options Center at: http://at.zacks.com/?id=2382. 4. ZACKS RANK BUY STOCKS Every day on Zacks.com we highlight four Zacks Rank Buy stocks. Each individual stock is chosen based on how well they match the criteria for the four main schools of investing: Aggressive Growth, Momentum, Growth & Income and Value. Aggressive Growth – Select Comfort Corporation (SCSS) More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Momentum – American Science and Engineering (ASEI) American Science and Engineering (ASEI), a featured Momentum Stock of the Day on Feb 28, 2006, made a new 52-week high on Friday on greater than average trading volume. This stock’s ability to make new highs on heavy volume with no news continues to impress. Read the full analysis on ASEI at : http://at.zacks.com/?id=2496. By raising its earnings guidance, coupled with a price-to-book ratio of 1.3, American Financial Group, Inc. (AFG) was one of four Value Zacks Rank Buy Stocks featured last week. Read the full analysis on AFG at: http://at.zacks.com/?id=2497.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Zacks Rank #1 and #5 Additions Zacks #1 Rank List: 31 New Additions (alpha by ticker)
To see the full list of Zacks #1 Ranked stocks (approximately 220 stocks), then click here. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Zacks #5 Rank List: 62 New Additions (alpha by ticker)
To see the full list of Zacks #5 Ranked stocks (approximately 220 stocks), then click here. 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=2385. Or view the full list of Zacks #1 Ranked stocks at: http://at.zacks.com/?id=2383. 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=2386. 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 05/22/2013
| Company Name | Symbol | %Change |
|---|---|---|
| ALLIANCE FIB | AFOP | 9.31% |
| SONIC FOUNDR | SOFO | 7.77% |
| VELTI PLC OR | VELT | 7.58% |
| TRI TECH HOL | TRIT | 6.62% |
| A M R CP | AAMRQ | 4.52% |
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