Monday - May 29, 2006
 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 After a sudden and major cool-down on Dalal Street (the Indian equivalent of Wall Street) in India last week, we were wondering if this might be a good time to increase our exposure to Indian stocks. We spoke with Zacks’ Director of Equity Research, Dirk van Dijk, CFA, about this, as he has just returned from a trip to Calcutta. Dirk, you recently returned from a trip to India. What are your initial impressions? First off, India is booming – everywhere you look you see new construction under way. However, you rarely see the big cranes; most of the construction work being done, even on high-rises, is decidedly low tech. Then again, labor is cheap here while capital is relatively expensive, so this makes sense. One manifestation of the construction boom is the price of concrete, which is up more than 70% just since last October. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - While there is still plenty of poverty to be seen in Calcutta, the city I visited, it is nowhere near as bad as I expected. I had expected that each time I stepped out I would be surrounded by begging street urchins, but beggars are rare. You are more likely to be hassled by panhandlers in Chicago or New York than you are in Calcutta. Calcutta is an interesting mix of the old and the new. It is one of the few places on earth where people still travel by rickshaw, and both the hand pulled and the bicycle versions are common (bicycle type more so). Auto-rickshaws, which appear to Western eyes to be gas-powered three-wheeled golf carts, are also extremely common. I imagine you saw lots of industry development when you were there. What stood out to you? Cell phone usage is perhaps even more common there than in the U.S., even amongst people of modest means. However, in all honesty I have not spent much time in the poorest slums, but I have seen a fair amount of the city, not just the luxury hotels. Computer and Internet usage is common, but at home, most people are still on dial-up. I would expect that to change over the next few years. We just saw a major correction in the Indian markets. Are you bullish on Indian stocks now? The Indian stock market had been red hot for the last three years, and I had been saying it was due for a short-term correction. Now that this has happened, take advantage of it – this country has enormous long-term potential. The country has a vibrant democracy and a functioning legal system (the wheels of justice turn slowly here, but they do turn, and in a fair and impartial manner). The population is very well educated, or at least a very substantial portion of it is. I strongly suspect that over the next ten years, a diversified portfolio of Indian stocks will generate returns three to four times as large as holding the S&P 500. This looks like a great opportunity to get in on a country with almost unlimited potential. Some of the bigger companies in the Zacks universe are listed as Holds right now, however. Most of the larger Indian ADRs such as Wipro (WIT) and Infosys (INFY) are really more plays on outsourcing than plays on the Indian economy. And I, myself, have not spent enough time looking at individual Indian stocks to issue a formal recommendation on any of them. However, some of the Indian Blue Chips such as Reliance Industries, ICICI Bank (IBN), Tata Motors (TTM) and Hindustan Lever are worth taking a closer look at. Read the complete Analyst Interview by clicking: http://at.zacks.com/?id=2723 Dirk van Dijk, CFA is the Director of Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog - NEW! Get real-time market insights from Zacks Equity Research Analysts. To see their latest posts, click here. Sempra Energy (SRE) - Stable Pipeline Earnings. For full Zacks research report, click here. Saks, Inc. (SKS) - Expect Weak Sales Trends. For full Zacks research report, click here. Strong Connections for Wire & Cable Products Outlook for 2006 Remains Bullish
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: Earnings and Margins This Profit Track goes to the heart of fundamental investing by finding companies with healthy earnings. The main ingredients are the search for Earnings Growth and Net Profit Margins. Then for good measure we make sure earnings estimates are moving higher which is a strong indicator of future performance and that brokerage firms are positively rating the stock. Earnings are the single most important metric for a company. Combine that with a healthy Net Profit Margin and you find a screen that has generated a cumulative return of +425% since January 2001. During 2005, this screen continued its winning ways with a +22.3% return. American Reprographics Company (ARP) recently announced first-quarter earnings of 32 cents per share, outpacing the consensus estimate by about 10% and surpassing the year-ago total. The company mentioned that it believes that its performance in the first quarter reflects its focus on top line growth and the overall strength of its operations. ARP generated earnings growth of 69% last year over the previous year. The company is profitable as evidenced by its net margin of 0.12. Continue your research on ARP at: http://at.zacks.com/?id=2254. Champion Enterprises, Inc. (CHB), a leader in factory-built construction, grew 164% last year compared to the year-prior. In mid-April, the company posted first-quarter earnings of 18 cents per share, which was above last year’s level. Revenues increased 42% to $346.5 million from the previous year’s $244.3 million. CHB stated that it will continue to pursue strategic acquisitions while at the same time working to improve manufacturing efficiencies in support of its goal to deliver record manufacturing margins and superior shareholder returns. Continue your research on CHB at: http://at.zacks.com/?id=2255. Compass Minerals International, Inc. (CMP), a leading producer and marketer of salt and specialty potash, meets the requirements for this Profit Track with annual earnings that were up 3% year-over-year. CMP recently reported first-quarter earnings of 88 cents per share, exceeding analysts’ expectations by nearly 16% and outperforming the previous year’s total. The company noted that this quarter demonstrated the strength of its mild-winter-weather management strategies as well as its ongoing effort to create value for its shareholders. Continue your research on CMP at: http://at.zacks.com/?id=2256. EZCORP, Inc. (EZPW), a Zacks #1 Rank (Strong Buy) company, has seen growth of 61% year-over-year. In late April, the company released fiscal second-quarter earnings of 56 cents per share, beating last year’s 29 and eclipsing the consensus estimate of 54 cents. The company commented that its quarterly results were driven by continued strong growth in its payday loan and credit service business and double digit growth in its pawn business. Continue your research on EZPW 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 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - A Relative Price Strength Screen Kevin Matras goes over a Relative Price Strength strategy for finding winning stocks in both up markets and down: http://at.zacks.com/?id=2259. 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 – Freescale Semiconductor, Inc. (FSL) Freescale Semiconductor, Inc. (FSL) has made it a habit of exceeding earnings estimates. The company has done so for all seven quarters that it has been public. Six of those quarters have seen double-digit earnings surprises. Six analysts have raised their numbers for 2006, while four have increased their estimates for 2007. Over the past 90 days, 2006 estimates have risen 16% to $1.96 per share. Read the full analysis on FSL at: http://at.zacks.com/?id=2510. Growth & Income – SEI Investments Company (SEIC) SEI Investments Company (SEIC) met or exceeded analysts’ earnings estimates for 10 straight quarters—surprising to the upside for nine quarters. Earnings per share are projected to grow 14.6% over the next 3-5 years. Analysts have been upping their earnings estimates for SEIC. The company is currently yielding 0.50% and has a five-year average dividend yield of 0.45%. Read the full analysis on SEIC at: http://at.zacks.com/?id=2511. More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Momentum – Daktronics, Inc. (DAKT) Daktronics, Inc. (DAKT) is experiencing increasing earnings estimates and has a history of earnings surprises, which the chart reflects. From an earnings standpoint, DAKT looks quite strong. The company has exceeded the consensus estimate in each of the past three quarters by an average margin of about 14%. This year's estimates have also increased by about 3% over the past 30 days. Read the full analysis on DAKT at: http://at.zacks.com/?id=2512. Value – Helix Energy Solutions Group, Inc. (HELX) Helix Energy Solutions Group, Inc. (HELX), a Zacks #1 Rank stock, topped the Street’s earnings estimate for the past four quarters by an average margin of 19.2%. The company recently raised the lower end of its full-year 2006 EPS guidance. Analysts’ earnings estimates have been trending higher. HELX stands to benefit from its announced acquisition of Remington Oil and Gas Corp. Read the full analysis on HELX at: http://at.zacks.com/?id=2513. Zacks Rank Resources
4. FEATURED EXPERTS Here we cast the spotlight on a timely Featured Expert commentary that recently appeared on Zacks.com. Renewed interest rate and inflation concerns resulted in stocks turning in their worst two-week performance in three years. The S&P 500 led in terms of performance despite a 1.9% decline. The Dow Jones Industrial Average fell 2.1%, while the Nasdaq Composite fell a similar 2.2%. The government's report last week on consumer price inflation has many investors contemplating another interest rate increase. The report indicated only minimally higher inflation than economists had expected. However, investors are hyper-sensitive to inflation following recent Federal Reserve comments regarding inflation and the continued high price of energy. The important thing to note is that the Fed would have already discounted this information when they raised interest rates during their May meeting. The move down in stock prices is nothing more than a pricing in of another interest rate increase. Insight is highly skeptical there will be another increase. Instead, there is a high probability the Fed will pause until this fall, at which time they will have had time to see the effects of past increases. One thing that is certain is the economy remains robust. A strong economy will help propel corporate earnings in the months ahead. With the recent downturn in prices, stock valuations have become quite attractive. This should be viewed as a buying opportunity, and overweighting a portfolio in the type of growth stocks recommended by Insight is advisable. A sampling of company news: Trident Microsystems (TRID) was down after an article in the Wall Street Journal questioned the company's previous stock option grants from 1995 to 2001. The company noted that its executive officers did not exercise the specific stock options being discussed in the article for an average of approximately seven years after the date on which they were granted and during certain portions of the intervening period, these options were worthless. The article does not offer any evidence of wrongdoing. The company has referred this matter to its Audit Committee for review. Netflix (NFLX) reaffirmed the company's expectations for net income and subscriber growth in fiscal 2006. Netflix anticipates it will earn a $32.5 million profit, which is bracketed by the company's statement last month that it expected to earn between $29.5 million to $35.4 million. Stock Picks include: Redback Networks (RBAK) is one of the leading providers of advanced networking systems that enable carriers, cable operators and service providers to rapidly deploy high-speed access to the Internet and corporate networks. Its products combine networking hardware with sophisticated software. The company's products connect and manage large numbers of subscribers using any of the major high-speed access technologies, including digital subscriber line, cable and wireless. Nuance (NUAN) is the leading provider of speech and imaging solutions for businesses and consumers around the world. Its technologies, applications and services make the user experience more compelling by transforming the way people interact with information and how they create, share and use documents. 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 05/21/2013
| Company Name | Symbol | %Change |
|---|---|---|
| SCIENTIFIC L | SCIL | 8.00% |
| NATUS MEDICA | BABY | 6.11% |
| SUMMER INFAN | SUMR | 6.02% |
| RADIANT LOGI | RLGT | 5.32% |
| NEW ORIENTAL | EDU | 4.51% |
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