Monday - June 5, 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 While technology investors look for signs that stocks in their industry will start to gain traction, senior analyst Larry Orlowski, CFA spoke with us recently to talk about the main thing that matters in a true growth industry: new product developments and advancements. What are some of the more interesting things you’ve seen in the semiconductor market lately? There have been some recent developments that I find kind of interesting. Not long ago, Advanced Micro Devices (AMD) heard from Dell (DELL) that Dell – which used to be exclusively an Intel (INTL) shop and only used Intel processors – said it would use AMD’s Opteron processors in their high-end servers. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This was a big surprise for a lot of people, but I had made a prediction that this would eventually happen. The Opteron processor has been considered a superior product to Intel’s offering. It’s a true 64-bit microprocessor, and it is very strong for doing mission-critical and data-intensive applications. So it shouldn’t be a surprise that Dell now feels this would be very good for its high-end servers. AMD has also been doing its research and coming up with very good products. It was the first company to come out with dual-core processors, which helps eliminate the problem with processors generating more and more heat the faster they are designed to go. Intel is trying to catch up with these types of products, and has started introducing its own multi-core processors, as well. So is this where you’re expecting to see industry growth going forward? Actually, I would be a seller of both AMD and Intel right now. AMD announced it plans to build a $2.5 billion factory in Germany to increase its manufacturing capability as demand and recognition increase. This is an area where Intel is very strong. They have a real advantage over AMD in the manufacturing area, as they can create much faster chips for a single processor at a much cheaper cost because of the size of the company. But the fears are that AMD is getting too big now, and that its competitive pressure with Intel will build and cause a price war. At that point, margins would fall for both companies. And most technology investors would have to ask themselves, “Why would I want to be in that market?” Aren’t you seeing semiconductor growth continuing in emerging markets? Sure. Of course there is still growth in large markets such as China and India, but this is really a maturing industry. The PC market is not the paradigm anymore for technology. In my view, we’ve grown beyond the PC-centric age and entered into one where the cell-phone is becoming the universal communicator. Where I’d want to be in technology right now is in handheld devices, specifically adding functionality to cell-phones. As we all know, the cell-phone has become an indispensable way to interact with the world, and especially with 3G networks allowing such fast Internet access these days, this is really where I see the paradigm shift taking place, and where I see more investing opportunity. This is one of the main reasons I have a Buy recommendation on National Semiconductor (NSM). National provides power management components for wireless devices such as cell-phones – but also including PDAs and other handhelds, as well – which are key analogue components for this technology, like amplifiers and data converters. The company also has a roster of top-shelf customers such as Nokia (NOK), Motorola (MOT) and Samsung. And NSM has recently come down in price; I think it’s really attractive here. The semiconductor market is huge. And while companies like Intel and AMD are taking the headlines at the moment, companies like National and Texas Instruments (TI) – which I actually have a Hold on right now – are supplying more and more functionality at higher speeds for people who continually want more options. A company like Intel has not been successful in breaking through into wireless cell-phone technology. There’s more potential for this in a company like National. 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. Suncor Energy (SU) - Direct Play on Oil Sands. For full Zacks research report, click here. Navarre Corp. (NAVR) - Too Many Question Marks. For full Zacks research report, click here. A&D Equipment Flying High 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: 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 continued to handedly beat the S&P 500. Arrow Electronics Inc. (ARW) reported first-quarter earnings of 68 cents per share in mid-April, surpassing analysts’ expectations of 60 cents and outpacing the year-prior total of 49 cents. The company mentioned that it posted its 13th consecutive quarter of year-over-year sales growth as it continued to take advantage of opportunities in the marketplaces it serves around the world. ARW offers a PEG ratio of 0.81 and a price/sales multiple of 0.32. Continue your research on ARW at: http://at.zacks.com/?id=2254. Concorde Career Colleges Inc. (CCDC), a provider of career training in allied health programs, recently released first-quarter earnings of 15 cents per share, exceeding the consensus estimate by almost 67% and improving on last year’s result. CCDC meets the criteria of this Profit Track with a PEG ratio of 0.71 and a price/sales multiple of 0.96. Continue your research on CCDC at: http://at.zacks.com/?id=2255. P.A.M. Transportation Services, Inc. (PTSI) is a Zacks #1 Rank (Strong Buy) company. PTSI sports a current ratio of 2.29 and a debt/equity level of 0.24. The company recently posted first-quarter earnings of 50 cents per share, eclipsing the previous year's 26 cents and beating analysts' expectations of 32 cents. PTSI stated that it experienced strong demand for its services during the quarter, which helped to drive a 13.4% increase in revenue, before fuel surcharge. Continue your research on PTSI at: http://at.zacks.com/?id=2256. Shoe Carnival Inc. (SCVL) has no debt and a current ratio of 2.73. The company recently announced first-quarter earnings of 54 cents per share, topping the consensus estimate by nearly 2% and exceeding the year-ago total of 45 cents. The company noted that net sales for the first quarter increased 4.8% to a first quarter record of $168.5 million from $160.7 million last year. Comparable store sales increased 4.1%. Continue your research on SCVL 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 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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=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 – CONSOL Energy, Inc. (CNX) CONSOL Energy, Inc. (CNX) has met or exceeded earnings estimates in eight out of the past nine quarters, with two of them resulting in surprises over 100%. Eight different analysts have raised their numbers for 2006. This year's estimates have increased 3.4% to $5.13 per share over the past 60 days. The stock is quite cheap, currently trading at 6.6x next year's estimates, well below the long-term growth rate of 18.50%, giving the stock a PEG ratio of 0.35. Read the full analysis on CNX at: http://at.zacks.com/?id=2510. Growth & Income – CSX Corporation (CSX) CSX Corporation (CSX), a stock that we first featured on Mar 29, 2006, has continued its winning ways. The company met or topped the Street’s estimates in nine of the past 10 quarters. Earnings per share are projected to grow 14.1% over the next 3-5 years. Analysts’ estimates have been trending higher. The company is currently yielding 0.78% and has a five-year average dividend yield of 1.3%. Read the full analysis on CSX at: http://at.zacks.com/?id=2511. More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Momentum – Hittite Microwave (HITT) Is Hittite Microwave (HITT) a buying opportunity? On Apr 27, HITT reported first quarter EPS of 29 cents, a 45% positive surprise over analysts’ expectations. Sales grew 47% to $27.9 million and Income grew 91.7% to $8.8 million. This was the third straight positive EPS report for HITT. Read the full analysis on HITT at : http://at.zacks.com/?id=2512. Value – NBTY, Inc. (NTY) NBTY, Inc. (NTY), a Zacks #1 Rank stock, recently topped the Street’s earnings estimate by 7.5% when it posted fiscal second-quarter profits of 43 cents per share. Earnings per share are projected to grow 13.0% over the next 3-5 years. Analysts’ profit forecasts have been on the rise for fiscal 2006 and fiscal 2007. NTY’s return on equity exceeds that of the industry average and the company has a price-to-book ratio of 2.3. Read the full analysis on NTY 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. Since John Reese and his team’s last issue, both the S&P 500 and the Validea Hot List have had a rough time. The Hot List was down 4.7%, while the S&P 500 was down 3.8%. Year-to-date, the Validea Hot List continues to handily outperform the S&P 500: 20.2 percent against 1.1 percent. Since the inception of the Validea Hot List, it has risen 166.7 percent, versus a gain of 26.1 percent for the S&P 500. An Addition to the Hot List Tower Group (TWGP) TWGP is favored by two guru strategies. One of the gurus is Martin Zweig. The strategy Reese bases on the writings of Martin Zweig likes this property and casualty insurer. It requires that the company's P/E be greater than 5 to eliminate weak companies, but not more than three times the current market P/E because the situation is much too risky, and never greater than 43. Tower Group's P/E is 24.48, based on trailing 12 month earnings, while the current market PE is 21.00. Therefore, it passes the first test. Revenue growth must not be substantially less than earnings growth. Tower Group's revenue growth (63.96 percent) is way above it's earnings growth (36.68 percent). To evaluate stability of earnings, the strategy has four tests, all of which must be passed. These include having a positive current quarterly EPS, a positive EPS for the quarter one year ago, a positive growth rate for the current quarter's earnings compared to the same quarter a year ago and the long term EPS growth rate. Tower Group passes all of these. Other tests the company passes include: EPS growth for the current quarter being greater than the prior three quarters, EPS growth for the current quarter being greater than the historical growth rate, earnings increasing each year for the last five years and long-term earnings growth being at least 15 percent (Tower Group's is 36.68 percent). A Sampling of the Hot List: Bank of America Corporation (BAC) is a bank holding company that conducts its operations though its bank and non-bank subsidiaries. The Company operates in 29 states, the District of Columbia and 44 foreign countries. The Corporation provides a diversified range of banking and nonbanking financial services and products domestically and internationally through four business segments: Global Consumer and Small Business Banking; Global Business and Financial Services; Global Capital Markets and Investment Banking, and Global Wealth and Investment Management. On June 30, 2005, the Company announced a definitive agreement to acquire all outstanding shares of MBNA Corporation (MBNA Merger), a provider of credit card and payment products. On June 17, 2005, the Company announced a definitive agreement to purchase approximately 9% of the stock of China Construction Bank (CCB). EnCana Corporation (ECA) is a natural gas producer in North America. It is a holder of natural gas and oil resource lands onshore North America. The Company is also engaged in select exploration and production activities internationally. EnCana operates under two main divisions: Upstream and Midstream & Marketing. The Upstream division manages EnCana's exploration for, and development and production of, natural gas, crude oil and natural gas liquids (NGLs) and other related activities. EnCana's Midstream & Marketing division encompasses the Corporation's market optimization activities and remaining midstream assets. EnCana is in the process of divesting the majority of its remaining midstream assets, including its natural gas storage business and the Entrega Pipeline. Invest with the confidence of knowing that your decisions have been validated by strategies of Wall Street legends that have proven to outperform the market. The Validea Hot List contains a portfolio of stocks that pass our interpretation of the strategies of the world’s most astute investment minds, including Graham, Lynch, Zweig, Buffett and others. Validea’s extensive research has shown that when these strategies agree, the result is market beating returns and low levels of risk. http://at.zacks.com/?id=2404. 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 05/20/2013
| Company Name | Symbol | %Change |
|---|---|---|
| ORBOTECH LTD | ORBK | 10.86% |
| SONIC FOUNDR | SOFO | 9.45% |
| VIPSHOP HOLD | VIPS | 9.20% |
| RENEWABLE EN | REGI | 8.98% |
| EAGLE BULK S | EGLE | 7.84% |
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