Friday - June 2, 2006
 Want to view the archive of past issues? Go to: http://at.zacks.com/?id=2283. Manage Profit from the Pros subscription: 1. ZACKS EQUITY RESEARCH Continuing on our assessment of how developments in technology are expected to affect that industry’s market going forward, we wanted to get a few words with Ken Nagy, our senior semiconductor analyst. How promising does he consider new technological developments? First quarter earnings provided positive surprises in many industries. How did semiconductors fare? On May 1st 2006, the Semiconductor Industry Association (SIA) reported worldwide sales of semiconductors of $59.1 billion in the first quarter of 2006, which was 7.3 percent higher than first quarter of 2005, when global sales were $55.1 billion. However, first-quarter sales declined by 1.3 percent from the fourth quarter of 2005, when sales were $59.9 billion. The SIA said the sequential decline reflected normal seasonal patterns. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - What are the main issues concerning this group as a whole going forward? Not surprisingly, cell phones have shown amazing growth in semiconductor content. Very strong sales of cell phones were a major contributor to the year-on-year increase in microchip sales. Cell phone unit sales increased by 31 percent from the first quarter of 2005 and ran substantially ahead of expectations. Unit sales are now expected to reach $1 billion this year. According to iSuppli, the average semiconductor content of a cell phone is now approximately $41 per unit. Cell phones now represent the second-largest market, after personal computers, for semiconductors. Cell phones and PCs now account for more than half of all semiconductor sales. The SIA cited two factors – a substantially shorter replacement cycle and very robust demand in China – for cell phone growth. China now has approximately 410 million cell phone subscribers. China is adding new subscribers at the rate of five million a month, and Chinese consumers appear to be choosing high-end phones with increased functionality. The replacement cycle for cell phones has declined from an average of 26 months to about 18 months, as manufacturers offer new products with smaller form factors and increased functionality. Semiconductor spending seems to have picked up a bit, but is it still behind what projections were a year ago or so? Overall Semiconductor spending is expected to grow by approximately 8.8%. Worldwide wafer fab equipment spending is projected to reach 28.9 billion in 2006, an 11.2 percent increase from last year. The wafer fab equipment market will be driven by increased capital expenditure (CapEx) budgets, which have risen significantly since Gartner's previous forecast report. Since December, the announced CapEx plans for the top 20 semiconductor manufacturers have increased by nearly $6.3 billion. Of that amount, approximately $4 billion is attributable to memory manufacturers that are responding to increased demand for DRAM and NAND Flash devices. What are your top Buy recommendations at this time? Cymer (CYMI) dominates the market for DUV light sources contained within excimer laser-based photolithography systems used in the production of semiconductors. Cymer delivered March quarter top- and bottom-line results that exceeded consensus estimates. Forward guidance is for revenue to be up 15-18% sequentially. Cymer’s 85% market share makes it the largest supplier of light sources used in the manufacture of stepper and scanner semiconductor production equipment. Lambda-Physik, one of its two direct competitors, will be exiting the photolithography light source market, which should create the opportunity for further share gains. To read the complete Analysts Interview, click http://at.zacks.com/?id=2306. Ken Nagy is a senior analyst covering the semiconductor sector for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog - NEW! Get real-time market insights from Zacks Equity Research Analysts. To see the latest posts, click here. ViroPharma (VPHM) - Attractive Valuation. For full Zacks research report, click here. Tekelec, Inc. (TKLC) - Reasons for Skepticism. For full Zacks research report, click here. Zacks Industry Rank for the Week of May 29 Data Dependency Overshadows Growth Picture
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: Return on Equity This Profit Track strategy uses Return on Equity (ROE) to discover solid stocks. ROE is one of the quickest ways to gauge whether a company is creating assets or gobbling up investors' cash. This fast moving Profit Track returned an impressive +19.1% in 2005. Here are four stocks that make the grade for the Recent Price Strength Profit Track: Assurant, Inc. (AIZ), a premier provider of specialized insurance and insurance-related products and services, reported first-quarter earnings in early May. Net operating income was $1.24 per share, which was ahead of the consensus estimate by nearly 35% and surpassed the previous year’s result. The company noted that tremendous results in its Solutions and Specialty Property businesses were the primary driver of improved net operating income. AIZ offers a ROE of 14.90 and a price to sales ratio of 0.84. Continue your research on AIZ at: http://at.zacks.com/?id=2290. Andersons, Inc. (ANDE) has an appealing valuation as indicated by its price to sales ratio of 0.59. The company’s ROE is 18.53. In early May, the company posted first-quarter earnings of 49 cents per share, exceeding the consensus estimate by approximately 172% and beating last year's total. ANDE said it is actively pursuing growth on several fronts: its much noted entry into the ethanol industry, continued growth in rail and commodity trading, development of new products, and process improvement initiatives in numerous areas of the company. Continue your research on ANDE at: http://at.zacks.com/?id=2291. Freescale Semiconductor, Inc. (FSL) provides embedded processing and connectivity products to large, high-growth markets. FSL meets the criteria of this Profit Track with a ROE of 15.20 and a price to sales ratio of 0.72. In mid-April, the company reported its financial results for the first quarter, stating that it is starting to see momentum in a number of key areas and its earnings growth continues to be strong. Earnings per share topped analysts' expectations by about 17% and outperformed the previous year's first quarter. Continue your research on FSL at: http://at.zacks.com/?id=2292. Swift Transportation Co. Inc. (SWFT), which has a ROE of 14.89 and a price to sales ratio of 0.66, announced first-quarter financial results in mid-April. Excluding items, earnings per share were 45 cents compared to the year-prior total of 21 cents. The result also eclipsed the consensus estimate by 73%. The company mentioned that its results reflect its disciplined approach to improving performance and the hard work and dedication of a terrific group of drivers and staff. Continue your research on SWFT at: http://at.zacks.com/?id=2293. To see the full list of stocks that currently pass this winning screen, go to http://at.zacks.com/?id=2294. 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=2295. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Using Common Sense to Manage your Portfolio Kevin Matras explains why monitoring your stocks is as important as picking them: http://at.zacks.com/?id=2289. 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 – Dress Barn Inc. (DBRN) Growth & Income – Cummins, Inc. (CMI) More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Momentum - OPNET Technologies, Inc. (OPNT) Value - Safeco Corporation (SAFC)
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.
Will he, or won’t he – that is the question. Of course, Charles Norton and Allen Gillespie are referring to the market’s persistent focus on the intentions of new Fed Chairman Ben Bernanke and the likelihood that he will pause at the FOMC’s next meeting on June 29, or whether it will be the August 8. That six week difference, it seems, equates to billions of dollars in stock market value that evaporated in the sessions following the May 10 FOMC meeting. Every economic data point and every word from every Fed governor is being analyzed by equity investors in an effort to gauge the Fed’s next action (or inaction). Besides investors’ uncertainty surrounding the Fed, another possible cause of the recent May swoon in equities is the reported liquidation of $3 billion hedge fund Saranac Capital Management. Meanwhile, corporate bond investors remain confident about company’s future profitability, as spreads remain tight. With stocks relatively cheap when compared to corporate bonds, stock buybacks and other shareholder friendly activities are picking up steam. American Express (AXP), for example, said it would buy back 16% of its outstanding stock and boosted its dividend. But at the end of the day, price and volume action, as well as the behavior of market-leading stocks, are the best data points to determine the market’s next move. The all-clear will be sounded on a follow through day, which is a heavy volume up day that normally occurs four to seven trading days from the low. In the meantime, Norton and Gillespie are continuing to scour for the next potential leaders. Programmed for Profit The Business Driver Thanks to TradeStation Group, Inc. (TRAD), stock brokers and institutional money managers can trade in real-time with sophistication and precision from anywhere in the country – including their homes. TradeStation keeps them connected to Wall Street at all times. Headquartered in Plantation, Florida, TradeStation is an electronic trading platform that offers state-of-the-art direct market access (DMA) order execution. For 15 years, clients have been able to design, test, optimize, monitor and automate their own custom trading strategies. Tradestation’s unique programming capabilities and commission structure distinguish it from the larger online brokerages and clearly target extremely active traders. The plan is working: TradeStation had nearly 27,000 brokerage accounts at the end of the first quarter, a year-over- year increase of 12.5%. While the growth is impressive, the total number of accounts falls short of E*Trade (ET), but TradeStation makes up ground in commissions. The average customer makes 740 trades a year, versus 15 for the typical E*Trade client. More trading equals more revenue. The average TradeStation account delivers roughly $4,000 a year in revenue, 8 times the $500 that comes from the typical E*Trade customer. In a business where commissions account for 89% of revenues, that’s a necessary edge over the competition. TradeStation ranked higher in client evaluations than formidable peers like TD Ameritrade (AMTD), Charles Schwab (SCHW) and E*Trade. Financial publications consider it best-in-class. In March, the company received the highest rating from Barron’s, and it’s already won 11 other major awards in 2006. The awards are a result of TradeStation’s innovative technology. Its interactive trading assistant, EasyLanguage, allows traders to test, monitor and automate the execution of their trading strategies much more quickly and effectively than before. Using RadarScreen technology, traders can comb through thousands of securities to target buying or selling opportunities based on their strategies, while monitoring quotes, charts and news in real-time. Need to step away from the computer? TradeStation can step in for you. Because EasyLanguage facilitates automatic trade execution according to user-defined rules, there is no requirement to be present throughout the trading session. TradeStation also offers personal support services through registered trade-desk representatives to execute orders for those who desire assistance. The company tapped into another real growth opportunity by targeting large institutional investors in addition to the day-traders. Buy-side traders becoming less and less satisfied with sell-side brokerage firms are embracing direct-access execution for their trading decisions. They are looking for a system that provides the fastest execution at the best possible price – and they’re finding it at TradeStation. TradeStation offers it all with the most advanced direct market access order execution. And the company never earns income from marking up customer securities or futures. Now, institutional investors can kiss sell-side firms goodbye. Fundamentals TradeStation’s quarterly earnings growth has been phenomenal with year-over-year increases of 100% and 200% in the past two quarters. Sales jumped 36% over the same period last year. On an annual basis, earnings are expected to increase 31% this year and 17% next. The company is also squeezing more profit out of each sale with both operating and net margins expanding year-over-year for three consecutive quarters. In the first quarter, operating margins were a whopping 61%. Net margins in the period were 37%, an increase of over 1,300 basis points from last year. Summary TradeStation’s top-notch program, supported by its second-to-none service ensures success for some time to come. Increasingly, investors will be swapping out the old for the new and improved. Supernova Stocks is an independent investment newsletter advisory that is committed to finding the most fundamentally superior and technically sound stocks that have the greatest growth prospects. Supernova Stocks focuses on the very best companies in top performing industry groups that have some institutional sponsorship, but are largely under-owned. Supernova Stocks is led by Charles Norton, CFA, a professional asset manager. http://at.zacks.com/?id=2348. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Jack Adamo says energy should finish the year in the plus column and highlights a stock insiders love. More... Mutual Fund expert Ron Rowland says it is often difficult to separate "cause" from "effect" in economic analysis. 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 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=2296. Or view the full list of Zacks #1 Ranked stocks at: http://at.zacks.com/?id=2297. 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 06/18/2013
| Company Name | Symbol | %Change |
|---|---|---|
| STAAR SURGIC | STAA | 10.98% |
| DTS INC | DTSI | 6.89% |
| ANIKA THERAP | ANIK | 6.04% |
| LUMOS NETWOR | LMOS | 5.70% |
| INSTEEL IND | IIIN | 5.28% |
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