Friday - June 9, 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 After a rather lengthy implementation process of VoIP and 3G wireless technologies in countries such as the Philippines, we were interested in seeing what comes next for this region in the industry. For his perspective, we interviewed Pacific Rim telecom analyst Peter Chua for his perspective. Because your coverage deals with the telecommunications industry in the region, I wanted to ask you: how are things progressing in the Philippines (and elsewhere) with VoIP and 3G? The technology is ready, but what investors should pay attention to are the government regulations, which we feel are pro-consumer. For example, in the Philippines, the National Telecommunications Commission (NTC) just awarded 3G licenses and frequency spectra in early January this year to four applicants, with possibly one more being contested by the non-winners. Currently, there are only three wireless services operators. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The NTC is also in the process of crafting a competition policy to regulate competition among industry players. The policy would be written in favor of smaller players by imposing Significant Market Power (SMP) obligations on dominant industry players. One proposed item is the unbundling of network elements that can be provided on a stand-alone basis such as access lines, switching functions, etc. to promote efficiency by avoiding unnecessary duplication of investments. Another item is the requirement to publish access prices and interconnection agreements to prevent anti-competitive behavior. Do you see growing competition in telecom creating any headwinds in the Asia/Pacific region for the major players in the industry? Asia/Pacific (ex. Japan) can be divided into two camps. The first includes the mature markets with high penetration rates like Singapore, Taiwan, Hong Kong and Macau. These areas have 90% to over 100% penetration rate, which means some of their populations have more than one subscription plan. They are expected to show slightly negative growth rates. In the other camp, there is some room for growth in the rest of China, India, Pakistan, Thailand, Indonesia, Vietnam and the Philippines. Most impressive in the group is China –- it was reported to have added 58 million subscribers in 2005, and is still growing at some 5 million a month. By the end of 2006, the Information Industry Ministry is forecasting that 33% of China’s total population will possess a mobile phone. This means it is still a long way from saturation. In your opinion, what is the best way for investors to play telecom growth in the region? An investor could choose to participate by investing in established handset makers or equipment manufacturers with significant exposure to the growth areas in the region. It minimizes concerns over accounting issues, corporate governance and management track records that direct investing would bring out. I noticed you recently released a research report on Philippine Long Distance Telephone Company (NYSE: PHI). What insights does this company give to the Asia/Pacific market in general? The company reported numbers that are typically seen in a low growth industry, flat revenue growth, slightly higher income and volume, lower capital expenditure and higher cash payout. There is a plan to increase cash dividend to common shareholders to 60% of 2006 earnings. To stimulate growth, the industry is moving towards 3G and broadband Internet access. Companies are now offering 3G services at a promotional rate for a limited time to subscribers with 3G handsets. However, the generally prohibitive cost of 3G handsets and low Internet penetration rates may hold back the rapid adoption of these new technologies in the near term.To read the complete Analysts Interview, click http://at.zacks.com/?id=2306. Peter Chua is a senior Zacks analyst covering the telecom industry on the Pacific Rim. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog - NEW! Get real-time market insights from Zacks Equity Research Analysts. To see the latest posts, click here. Center Financial Corp. (CLFC) - ROE Above Peer Levels. For full Zacks research report, click here. Merck & Co. (MRK) - Growth Still a Ways Off. For full Zacks research report, click here. Oil Machinery and Equipment in Demand Earnings Still Strong
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: Low Price Stocks Many investors prefer stocks priced below $20 because the low prices allow them to accumulate more shares. Fortunately, lower prices do not necessarily mean lower quality. This strategy identifies stocks priced below $20 that are trading at discount valuations and have a Zacks Rank of #1 ("Strong Buy") or #2 ("Buy"). The stocks identified by this search strategy trade at price-to-sales (P/S) multiples of 1.0 or below. The strong Zacks Rank is indicative of positive revisions in earnings estimates. Combining these characteristics can result in high-dollar returns. In 2005, this strategy generated a stellar +51.9% return. Here are four stocks that make the grade for the Low Price Stocks Profit Track: Commercial Vehicle Group Inc. (CVGI), a leading supplier of fully integrated system solutions for the global commercial vehicle market, has earned $2.55 per share during the past 12 months. In late April, the company reported first-quarter earnings of 62 cents per share, exceeding the consensus estimate by almost 22% and beating last year’s 59 cents. CVGI offers a price-to-sales ratio of 0.51. Continue your research on CVGI at: http://at.zacks.com/?id=2290. Pinnacle Airlines Corp. (PNCL) released first-quarter earnings of 61 cents per share in late April. The result soared past the consensus estimate of 39 cents and outpaced the previous year's pro forma earnings per share of 55 cents. Pinnacle Airlines satisfies the criteria for this Profit Track with a price-to-sales ratio of 0.17 and earnings per share profitability of $2.44 over the past 12 months. Continue your research on PNCL at: http://at.zacks.com/?id=2291. Republic Airways Holdings Inc. (RJET) posted first-quarter earnings of 39 cents per share in late April. The result topped analysts’ expectations by approximately 8%. Total operating revenues increased 22.7% year-over-year. Value investors may find RJET to be appealing based on its price-to-sales ratio of 0.72. The company has seen earnings of $1.51 per share over the past 12 months. Continue your research on RJET at: http://at.zacks.com/?id=2292. Movie Gallery Inc. (MOVI), a Zacks #1 Rank (Strong Buy) company, experienced earnings of $1.71 per share over the past 12 months and has a price-to-sales ratio of 0.09. In early May, the company released first-quarter results, which included earnings per share that more than doubled the year-ago total. Movie Gallery is the second largest North American video rental company with approximately 4,800 stores located in all 50 U.S. states, Canada and Mexico. Continue your research on MOVI 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. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Pulling Profits and Cutting Losses Kevin Matras looks at how to use Price and Volume for locking in profits, cutting losses and spotting potential trend changes: 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 – Expeditors International of Washington, Inc. (EXPD) Growth & Income – United States Steel Corporation (X) More...
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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.
Pioneer Drilling Reports Record Quarter Pioneer Drilling (PDC) released impressive earnings figures for its fourth quarter and fiscal year 2006, which ended March 31. Revenue grew from $55.4 million in the fourth quarter of fiscal 2005 to $82.8 million in the fourth quarter of fiscal 2006, amounting to an increase of 50%. Over the same period, net income grew at an even more impressive pace, moving up from $5.5 million or $0.14 per diluted share to $18 million or $0.36 per diluted share. From 2005 to 2006, revenue grew an impressive 53% to $284.1 million from $185.2 million. Net income for the fiscal year 2006 was $50.6 million, up significantly from $10.8 million in 2005. On a per share basis, net income increased from $0.30 to $1.06. Pioneer's strong revenue in both the fourth quarter and fiscal 2006 can be attributed to high demand for rigs in the firm's operating markets. Compared with the year ago quarter, heightened demand resulted in a 34% increase in average revenue per day and a 13% increase in the average number of rigs in operation to 55.3 as the company brought more rigs online in order to meet customer demand. Over the same period, the firm increased drilling margin (drilling revenues - drilling costs) per day by 97% to $8,259 from $4,202. The key figure of utilization rate remained virtually unchanged for the year, coming in at 95% for 2006 versus 96% for 2005. Ian Wyatt and his team believe that Pioneer Drilling is well positioned for continued growth in the upcoming quarters, having brought online the third and fourth rigs thirteen rigs as part of its new build program, in addition to spending $21 million to upgrade existing rigs and budgeting $22 million for rig upgrades in fiscal 2007. Youbet.com (UBET), a leading online handicapping web site, announced that it processed $4.2 million in wagers on the Preakness Stakes, an 19% increase from last year's Preakness race. The company reported that more than 97% of its customers live greater than 25 miles away from Pimlico where the Preakness takes place each year. However, by using Youbet.com these individuals were able to quickly and easily place bets online from the comfort of their homes. CEO Charles F. Champion feels that, "Youbet's performance the day of the Preakness demonstrates again that online broadcasting of and wagering on live horse racing continues to grow in appeal." The Preakness happens to be the second leg of the Triple Crown. The next leg, the Belmont Stakes, should also provide a good measurement of the degree of wagering that's engaged in online. Sonic Solutions (SNIC), a leading DVD software company, reported another record quarter demonstrating the company's leadership in this growth industry. For the quarter and fiscal year ended March 31, 2006, net revenue, gross profit and net income all soared to record levels. For the fourth quarter 2006, revenue increased 13% to $40.4 million from $35.6 million the year ago quarter. For the year, revenue grew 64% from $90.6million to $148.7 million. Gross profit for the quarter increased 18% to $32.7 million from $27.8 million in the fourth quarter of 2005. From 2005 to 2006, gross profit grew at an impressive 51% clip, from $75.9 million to $114.6 million. Sonic's impressive top line growth resulted in record profits for the quarter and the fiscal year. For the fiscal year 2006, net income was a record $19.3 million or $0.70 per diluted share, up from 2005's net income of $8.5 million or $0.32 per diluted share. The net income figure for the quarter was unique in that the $2.1 million or $.08 per diluted share includes an extremely high provision for income taxes, 77.2%. This high effective tax occurs because Sonic is in the process of transitioning from a company with significant deferred tax credits (tax loss carry-forwards) to a profitable firm that must now begin paying taxes. To compare with previous quarters, if the net income were adjusted upward using the effective tax rate that was used in the guidance, 7.4%, it would have resulted in the non-GAAP figure of $8.5 million, or $0.31 per diluted share. This is a vast improvement on the $0.05 cents earnings per diluted share figure from the fourth quarter of 2005. Looking to the future, CEO Dave Habinger commented, "As new formats and channels such as HD and download and burn, emerge and develop, we believe Sonic is well positioned to continue to lead the market for digital media software." Growth Report’s Ian Wyatt is on a mission to discover undervalued high growth investment opportunities by guiding investors through uncertain markets with sensible investment ideas and a proven investment philosophy. Growth Report’s long-term approach to investing in small-cap growth stocks delivered returns of 40% in 2002, and 52% in 2003. Some of Ian’s individual stock picks were up 1,091%, 849%, and 357% in 2003. http://at.zacks.com/?id=2400. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - b) S&P to Remain Broad and Volatile Dr. Melvin Pasternak expects the S&P to remain in a broad and volatile trading range during June. More... c) Growing Concern Over Inflation Dennis Slothower explains that inflation concerns have been echoed again this week. Check out the latest numbers. 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 06/19/2013
| Company Name | Symbol | %Change |
|---|---|---|
| SONIC FOUNDR | SOFO | 4.40% |
| SUPPORT.COM | SPRT | 3.75% |
| UNISYS | UIS | 3.31% |
| SHORETEL INC | SHOR | 3.22% |
| GREEN MTN CO | GMCR | 3.13% |
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