Wednesday - April 12, 2006
 Want to view the archive of past issues? Go to: http://at.zacks.com/?id=2319. Manage Profit from the Pros subscription: 1. ZACKS EQUITY RESEARCH Many companies with extensive businesses in Europe have reported disappointing results in the region lately. Is Europe due for a rebound? We spoke with senior European analyst Santiago Burgaleta, CFA to find out if companies in his coverage are poised to perform better. U.S. Energy stocks are currently leading the market. Is this the case in Europe, too? The European Energy sector has underperformed the one in the U.S. as mega-caps like BP (BP) and Royal Dutch Shell (RDSC) have slightly disappointed investors, but we believe this is just a temporary pullback. TOTAL (TOT) has one of the best long-term production profiles compared to other majors, and although short-term output is a bit under pressure, in the longer-term, TOT will deliver 4-5% production growth, outperforming the majors. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - What do you think about Swiss company Adecco’s recent acquisition of the German company DIS? Does your outlook remain positive on Adecco? We are still buyers of Adecco (ADO) on the back of this acquisition. We view the acquisition of DIS AG as a catalyst for Adecco to break out of its trading range. DIS is the number one professional staffing company in Germany, and number five in the overall German staffing market, with an estimated market share of 4.8%. It has estimated 2005 sales of €305 million and an estimated 2005 EBIT of €36 million. Margins are along the lines of some of the best in Europe with 12%, with a top-line growth of over 18% in the last five years. It is a less cyclical company than the industry as a whole thanks to its high level of specialization. The exposure to the cyclical Industrial sector is far bellow the average of 65%, and Engineering represents 29% of revenues. We do not think this acquisition is earnings accretive in 2006, but we believe it represents a positive catalyst for the stock. We think it represents a turning point for Adecco – its professional staffing services exposure will be boosted, and its competitive position in Germany will dramatically improve. Also, DIS enjoys a top management team that will help increasing investors’ confidence in Adecco’s execution capabilities. In addition, this acquisition nearly doubles the size of Adecco in Germany. This is a step in the right direction, as Germany has the largest employment market in Europe. It diversifies Adecco away from the troubled French market, and it also enhances growth potentials. The German staffing market has a very low penetration rate of nearly 1%, compared to an average of 2.8-3.2% in the rest of Europe. You do have Buy recommendations on other Swiss stocks these days, don’t you? Yes I do. Syngenta (SYT) is still a Buy, although now it trades at a premium valuation to its history. We suggested in our last report that investors might need time to digest this premium, but compared to Monsanto (MON), it is still undervalued. Many investors believe Monsanto is not a comparable because of its bio-genetic business, but SYT is making big progress on this front, and it is still trading at 30-45% discount valuation to Monsanto. We believe this should narrow, giving upside to SYT. What would be your top Buy recommendation at this time? Well, we continue to have a Buy on Syngenta (SYT) as we are still bullish on the company and the sector is involved in a short-term correction. We would buy the stock on weakness. However, if I had to pick one stock to buy in my coverage right now, it would be Adecco (ADO). Adecco announced on February 13th that the offer price for its voluntary tender offer for all outstanding shares of German-listed DIS AG has increased from €54.50 to €58.50 per share in cash. German Voith AG, Heidelheim, and Jupiter Asset Management, London, both agreed to immediately sell their shares in DIS AG based on the increased offer price. We believe that the stock may react negatively to this increase and would use weaknesses to add to positions, but we do not think it will have a material impact going forward. Even more, we feel it will secure the transaction. Santiago Burgaleta, CFA is a senior Zacks analyst covering European companies in a variety of sectors. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog - NEW! Get real-time market insights from Zacks Equity Research Analysts. To see their latest posts, click here. Aladdin Knowledge (ALDN) - Run-Up Unsustainable. For full Zacks research report, click here. UIL Holdings (UIL) - Dividend Unsustainable? For full Zacks research report, click here. Zacks Industry Rank for the Week of Apr 10 First quarter Expectations Plunge for the Energy Sector
2. SCREEN OF THE WEEK Zacks.com offers three unique weekly commentaries that all
further our mission to help you Profit from the Pros. Today is
the latest installment of Screen of the Week from Kevin Matras.
Each week, Kevin shares with you another winning screen he has
discovered using the Research Wizard software from Zacks
Investment Research. Learn more about the Research Wizard at: http://at.zacks.com/?id=2335. “Great Stocks often have Great Peers” We’ve mentioned it here before, but it’s worth saying again; nearly half of a stock’s price movement is tied to the performance of its respective group (Sector and Industry). That being said, most great stocks from great groups often have great peers as well. If you find yourself in a killer trade (or wished you were in one), take a look at the characteristics of THAT STOCK and then hunt within its group to find OTHER STOCKS that share the same characteristics. Does a certain outstanding stock exhibit great sales growth? I’m sure there are at least a few within its group that are also showing similar numbers. What about increasing margins? If the stock is doing well, it’s likely that the industry itself is experiencing meaningful increases in margins as well. This type of screening is often called ‘modeling’. Figure out the components of what makes something successful and concentrate on that. If you’re in love with a certain stock or sector, but it’s not doing anything, ... or worse, moving against you, move on. If you see great stocks in great groups while you’re bemoaning your misfortune in laggards or non-movers, find what stocks are successful and model them. If the winningest stocks in a particular sector or industry are trading at PE ratios that you generally won’t consider, ... instead consider this; if you had considered them, they would be winning for you. So therefore, see what characteristics some of the best stocks have in common and try getting on some of those. Here’s something to start you off. The top three Sectors based on the percentage of stocks at (or within 10% of) their 52-week highs are listed below. Current standings:
Previous standings from Oct 25, 2005 (the last time I wrote about this):
Here are a few stocks from each of those current top sectors (for Monday, Apr 10, 2006);
Now try screening for stocks in these Sectors that are in the best Industries. In fact, with the Research Wizard, you can rank the Industries on whatever item you choose. (Same thing for the Sectors.) Want to find the ‘best’ Industries based on the Zacks Rank? You can. What about the highest ROE or biggest Earnings Estimate Revision? That’s no problem. Whatever items you want to use to rank your Industries, it can all be done with a few clicks of the mouse. You can even narrow it down to the best stocks within those groups – again, based on whatever criteria you choose. To search for the best stocks (and Groups) yourself, sign up for your two-week FREE trial to the Research Wizard. Remember the key to successful screening is in discovering those screens that have produced profitable results in the past. And that’s exactly what you get with the powerful Screening and Backtesting ability of Research Wizard. Click here to learn more. Discover all the Free Screening Tools on Zacks.com at: http://at.zacks.com/?id=2336. Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. 3. 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 – Digene Corporation (DIGE) Digene Corporation (DIGE) has met or exceeded earnings estimates in five out of the past six quarters, with the last two surprises averaging over 100%. Seven different analysts raised their numbers for this year. Over the past 60 days, estimates for fiscal 2006 have increased 8.3% to 65 cents per share. Despite the strong year-to-date gain of 31%, the stock is still attractively valued. Read the full analysis on DIGE at: http://at.zacks.com/?id=2498. Growth & Income – The Boeing Company (BA) The Boeing Company (BA) upped its 2006 earnings guidance in early February after releasing solid results for 2005. The company has topped analysts’ expectations in 11 of the past 12 quarters. Earnings per share are forecasted to grow 13.6% over the next 3-5 years. BA has a current dividend yield of 1.5% and a five-year average dividend yield of 1.7%. Read the full analysis on BA at: http://at.zacks.com/?id=2499. More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Momentum – Leap Wireless (LEAP) Leap Wireless (LEAP) is an unusual wireless company. It’s a growing wireless cellular provider who distinguishes itself by offering services without long-term commitments or credit checks. It offers both Cricket® service and Jump Mobile, a cellular product aimed at the urban youth market. According to the company’s website, 52% of Cricket® customers have ‘cut the cord’ and rely on their mobile phone as their sole phone compared to an industry average of 6%. On Mar 16, LEAP announced earnings for the December 2005 quarter at eight cents per share, in line with analysts’ expectations. LEAP is a Zacks #1 Rank stock. Read the full analysis on LEAP at: http://at.zacks.com/?id=2500. Value – Southern Union Company (SUG) Southern Union Company (SUG), a Zacks #1 Rank stock, has topped analysts’ earnings estimates in four straight quarters, most recently by 35.7%. The company’s growth is expected to continue into 2006, aided by its recent acquisition of Sid Richardson Energy Services Co. SUG has a price-to-book (P/B) multiple of 1.7 and a return on equity of 11%. Read the full analysis on SUG at: http://at.zacks.com/?id=2501.
4. 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.
Historically, the first two weeks of April tend to be weak ones for the market. However, with growing optimism over strong first quarter earnings, Donald Rowe and his team expect a substantial move-up in stock prices between mid-April and August. Liquidity is at record levels and the stock market is still undervalued by 30 percent. Cash corporate buybacks and merger and acquisition activity continues, shrinking the number of shares available for purchase. In addition, the M3 money supply, at more than $10 trillion, is at a record high. All of this is bullish and points to higher stock prices ahead. For now, Rowe and his team continue to focus their recommendations in the technology sector, and the small- and mid-cap stocks and indices. Joy Global, Inc. (JOYG) is a worldwide leader in manufacturing, servicing and distributing equipment for surface mining through its P&H Mining Equipment division and underground mining through its Joy Mining Machinery division. Lawson Software, Inc. (LWSN) is a leading provider of enterprise software solutions targeting specific services industries. They offer comprehensive financial management, human resources, professional services automation, procurement, distribution and customer relationship management solutions designed to manage, analyze and improve their customers’ businesses. Their software solutions automate and integrate critical business processes, facilitating collaboration among customers, partners, suppliers and employees. NetLogic Microsystems, Inc. (NETL) is a semiconductor company that designs, develops and markets high performance knowledge-based processors for a variety of advanced Internet, corporate and other networking systems, such as routers, switches, network access equipment and networked storage devices. NetLogic Microsystems' knowledge-based processors employ an advanced processor architecture and a large knowledge database containing network and network user information to make complex decisions about individual packets of information traveling through the network. On Assignment, Inc. (ASGN), through its first operating division, Lab Support, is a leading nationwide provider of temporary scientific professionals to laboratories in the biotechnology, pharmaceutical, food and beverage, chemical, and environmental industries. The company's strategy is to serve the needs of targeted industries for quality assignments of temporary professionals. Red Hat, Inc. (RHAT) is a leading developer and provider of open source software and services, including the Red Hat Linux operating system. Unlike proprietary software, open source software has publicly available source code and can be copied, modified and distributed with minimal restrictions. The web site, REDHAT.COM, is a leading online source of information and news about open source software and one of the largest online communities of open source software users and developers. A SUPER ECONOMIC BOOM IS COMING! Momentum investor, Donald Rowe brings decades of experience and helps you utilize The Wall Street Profit System 2005™ to double your money every three years! http://at.zacks.com/?id=2537 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - b) Validea Hits a Trifecta Again John Reese says the Hot List outperformed the S&P. Discover how well it has fared and check out some stocks: More... Jack Schannep says investors should keep looking ahead and stay fully invested. Benefit from his insight. More... 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 (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=2332. Or view the full list of Zacks #1 Ranked stocks at: http://at.zacks.com/?id=2279. 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 to help take definitive action to improve your portfolio's performance. Did we mention it's free? Get started now! 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 Zacks Performance Rank performance is the total return of equal weighted simulated portfolios consisting of those stocks with the indicated Zacks Rank net of fees. Results reflect the reinvestment of dividends and other earnings. Simulated results do not represent actual trading and may not reflect the impact that economic and market factors might have had on decision-making if an adviser were actually managing a client's money. 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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