Wednesday - July 5, 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 Just in time for the summer vacation season, crude oil prices are rising. On Friday, oil prices closed at $73.93 per barrel – almost a six-week high. Reports from the weekend suggest the roads were crowded heading into the Fourth of July holiday, boosting demand for gasoline. Increasingly, the United States is facing competition from developing countries for oil, which brings us back to the Oil & Gas-International Integrated group for the second consecutive week. Three companies within this group have been recent beneficiaries of positive earnings estimate revisions. Three of the seven covering analysts raised their forecasts on Brazil’s Petrobras (PBR). Two of the four covering analysts raised their forecasts on Repsol YPF (REP), a Spanish/Argentine company. One of the four analysts raised his projection on PetroChina (PTR). All three are Zacks #1 Rank stocks. Other than a rise in the price of crude, there was no news to explain the recent upward revisions. The most likely reason is that oil’s ability to maintain elevated prices is causing analysts to be more optimistic about the earnings outlook for these companies. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The Norwegian oilfield service workers strike is continuing, but analysts have yet to adjust their estimates as a result. However, on Friday, Norsk Hydro (NHY) did cut its oil and gas output target. The company anticipates producing 585,000 barrels of oil equivalents per day this year, a 5% reduction from its previous guidance. The company blames lower production and production problems in Norway, the U.S. Gulf of Mexico and Canada for the revision. NHY specifically stated that the strike was not accounted for in the revised target. One analyst raised his target on NHY last week — prior to the release of the company’s new production target. The revision brought the consensus estimate up to $2.57 per share. A month ago, the estimate stood at $2.32 per share. High oil prices are one of the concerns that some observers have about the pace of economic growth in the second half of the year. Rising interest rates are another, though the Federal Open Market Committee hinted that it was considering an end to its streak of interest rate hikes. Given that there will only be one set of PPI, CPI, industrial production and durable goods orders reports before the August meeting, an 18th hike seems probable. The Committee will also take into account second-quarter earnings. A total of 81 companies within the Zacks Rank universe have reported so far. Positive earnings surprises have outnumbered negative surprises by a ratio of 3.7:1. Although this is far too small a sample to be representative of how most companies will measure up, it does establish a good base on which to build. Another sign pointing towards strong second-quarter earnings is the relative tameness of earning warnings season. Although the number of negative revisions did increase recently, the total number of cuts remains proportionately low. Based on a rolling four-week period, 8.1% of full year estimates for all companies within the Zacks Rank universe have been revised downward versus 7.6% a week ago. Conversely, 7.9% of full year estimates have been revised upward versus 7.6% a week ago. Just prior to the start of first-quarter earnings season (Mar 27), 14% of all estimates had been revised downward and 12% were revised upward. As I have previously stated, the overall number of revisions declined throughout most of June. In the case of warnings, no news is good news. Given the positive initial profit reports and the relative lack of negative revisions, second-quarter earnings season appears likely to be good, with bullish reports coming out of multiple companies. Forecasts call for the average company within the Zacks Rank to have generated 17.3% growth last quarter. Full-year estimates are calling for 24.5% growth. Charles Rotblut, CFA is a senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog - NEW! Get real-time market insights from Zacks Equity Research Analysts. To see their latest posts, click here. Palm, Inc. (PALM) - Smartphone Market is Solid. For full Zacks research report, click here. UIL Holdings (UIL) - Dividend to be Cut?. For full Zacks research report, click here. Still Bullish on the Lodging and Apartments Sector Selection Key to Second Quarter Earnings
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. “Finding Growth Stocks at Excellent Values” This week’s screen has something for both Growth Investors and Value Investors. Growth Investors focus on companies with great earnings growth. However, that alone isn’t good enough for many stock pickers any more. They want good growth at reasonable prices (low P/E’s). And while Value Investors focus on low P/E stocks, too many are low because they lack earnings power. So instead, try combining the best of both worlds by focusing on companies with the highest growth rates and the lowest P/E ratios. The screen I’m running this week is as follows:
This week (for the week of 7/3/06), there are 23 companies that passed this screen. Here are three from the list that look great;
Incidentally, this screen backtested very well too. And while it wasn’t designed to be a trading strategy per se’ (15-20 stocks on average is a lot of stocks to trade every month), this screening strategy beat the market every year for the last five years (2001 thru 2005). (I ran a series of tests over the last five-year time span, using a four-week rebalancing period. Each run was rebalanced over a different set of four-week periods to eliminate coincidence and verify robustness.) In 2001, this screen showed an average annualized gross return of 42.6%. In 2002, it was 19.1%. In 2003, it was a whopping 93%. In 2004, it came in at 40.4%. Last year it was up 11.9%. And so far in 2006 (YTD -- through 6/16/06), its average compounded gross return is up 5.1%. This screen is an excellent way to find good growth companies that also have low valuations. Check it out for yourself and get the rest of the stocks on this list. See where your stocks Rank out of all of the other stocks out there, and test your own strategies and see how they’ve done. Find out what works and what doesn’t. It can all be done with the Research Wizard stock picking and backtesting program. Sign up now for your two-week free trial and learn how. http://at.zacks.com/?id=2335 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 – Genentech Inc. (DNA) Genentech Inc. (DNA) closed higher last Friday, after the Food and Drug Administration approved its age-related blindness treatment, Lucentis. intends to market the drug to about 1,500 U.S. retina specialists. This approval should be a boon to the stock, so it is still worth holding onto despite it being down 11% since we first profiled it. Read the full analysis on DNA at: http://at.zacks.com/?id=2498. Growth & Income – Manitowoc Company, Inc. (MTW) Manitowoc Company, Inc. (MTW) recently raised its earnings for the full year. The company now expects 2006 earnings to be between $2.50 and $2.60 per share. Previously, MTW projected a range of $2.15 to $2.25. The company noted that its global leadership in the lifting industry continues to drive its strong financial performance. Analysts have been bullish on estimates as well. Current 2006 earnings forecasts moved up 9% in the just the past seven trading days. Read the full analysis on MTW at: http://at.zacks.com/?id=2499. More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Momentum – Daktronics(DAKT) Daktronics(DAKT) set a new 52-week high on Friday, gaining more that 25% since it was last a featured Momentum stock of the day. Read the analysis of DAKT at: http://at.zacks.com/?id=2500. Value – Metrologic Instruments, Inc. (MTLG) Metrologic Instruments, Inc. (MTLG) last week announced that Harold A. Ackerman, United States District Judge for the District of New Jersey, granted its motion for summary judgment against Symbol Technologies in a contract action for unpaid royalties. Metrologic calculates its damages for royalties and interest as of June 30, 2006 to be in excess of $2.6 million. This is a big boost for the company and removes a legal hassle for the company. Read the full analysis on MTLG at: http://at.zacks.com/?id=2501.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Zacks Rank #1 and #5 Additions Zacks #1 Rank List: 80 New Additions (alpha by ticker)
To see the full list of Zacks #1 Ranked stocks (approximately 220 stocks), then click here. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Zacks #5 Rank List: 61 New Additions (alpha by ticker)
To see the full list of Zacks #5 Ranked stocks (approximately 220 stocks), then click here. 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.
In last month’s issue of DRIP Investor, Charles Carlson laid out a detailed look at the market and explained that the violent pullback stocks had been experiencing should be viewed as a correction within a bull market and not the beginning of a bear market. He also provided specific points on the Dow that would likely be the low point for this correction, namely the 10,700 level. A decline in the Dow to this level would represent a two-thirds retracement of the previous rally, and such retracements were typical for bull-market corrections. What has happened since that review in DRIP Investor has been textbook relative to a secondary correction. Indeed, the Dow Industrials closed on June 13 at 10,706.14, fulfilling the parameters of a two-thirds retracement. Interestingly, on June 14 and 15, the Dow rallied 309 points to carry the Dow Industrials back above 11,000. Admittedly, it would be a bit premature to say that it is onward and upward from here for the market. However, the fact that the market did bounce with authority off of a level that represents a logical bottoming point is a positive for stocks. Another factor that points to a bottom being in place is the sharp decline in the percentage of stocks on the New York Stock Exchange trading above their 200-day moving average. That percentage fell to 33% before bouncing to 41%. To quantify that percentage, a level below 40% is usually perceived as “lower risk” for the market. The upshot is that it appears that the worst of the correction is behind the market. What Carlson expects to see is a period when stocks gather themselves for the next move upward. He wouldn’t be surprised to see the Dow trade between 10,700 and 11,300 for the next three months before moving higher in the fourth quarter of this year. From a DRIP perspective, the market’s decline is providing an opportunity to pick up quality stocks that have fallen sharply in the last two months. Down But Not Out Conoco Phillips (COP)has come down along with a number of energy-related issues. Carlson continues to like the quality oil stocks for their appreciation and dividend-growth potential. ConocoPhillips yields around 2.5%. He would expect the stock to bounce back nicely as the market rallies and view the current stock price as an excellent entry point. Minimum initial investment is $250. The firm will waive the minimum if an investor agrees to automatic monthly investment via electronic debit of a bank account of at least $25. There are no purchase fees. Selling fees are $15 plus $0.05 per share. Carlson owns Motorola (MOT) and remains a bull on the stock. These shares have pulled back about 20% from their 52-week high of nearly $25. While the company has done an excellent job of repairing its cellphone business in the last three years, competition remains keen. Still, Motorola has been up to the test with innovative products, such as the firm’s new Q phone. Per-share earnings should be up at least 15% this year. Motorola’s minimum initial investment is $500. The firm will waive the minimum if an investor agrees to automatic monthly investment via electronic debit of a bank account of at least $50. There is a one-time enrollment fee of $15. Purchase fees are $5 ($2 if made with automatic monthly investment) plus $0.06 per share. Selling fees are $15 plus $0.12 per share. The only newsletter dedicated to the profitable world of dividend reinvestment plans, DRIP Investor helps its readers pick stocks with staying power and strong growth potential. The monthly newsletter is edited by Chuck Carlson, the acknowledged expert on DRIP plans; http://at.zacks.com/?id=2543 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Jack Adamo believes investors should keep their guard up since the relief rally is not likely to last long. Read his commentary and gold update: More... Gregory Spear suggests buying on dips and pauses for now. Learn why and check out a play on global infrastructure development. 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 06/18/2013
| Company Name | Symbol | %Change |
|---|---|---|
| STAAR SURGIC | STAA | 10.98% |
| LUMOS NETWOR | LMOS | 5.70% |
| INSTEEL IND | IIIN | 5.28% |
| ERICKSON AIR | EAC | 5.10% |
| ASSURED GUAR | AGO | 4.98% |
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