Friday - August 11, 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 As second quarter earnings season heads into its remaining days and weeks, we were interested in finding out how healthcare companies had been coping with the incorporation of Medicare Part D issues. This being the first quarter where results of the program show up in earnings reports, we spoke with senior analyst Chris Kallos to learn what some of the effects have been. So far this earnings season, how are things progressing for healthcare stocks? Earnings numbers overall have been generally healthy so far, with the possible exception of Aetna (AET), which reported a higher-than-expected medical loss ratio and disappointing enrollment growth, easing concerns of increasing competitive pricing. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - However, more importantly this quarter, we saw the first real glimpse into the impact of Medicare Part D since its introduction in January. That said, Humana (HUM) reported a sequential increase of 1.5 million stand-alone PDP members, up 77%, primarily driven by strong sales during the final two weeks of the open enrollment period. Notwithstanding the increase in MLR associated with Humana’s aggressive targeting of Medicare Part D beneficiaries, we believe the company has gained an important stake in this emerging segment and an opportunity to cross-sell higher margin products longer term. Are investors still keeping the less-volatile healthcare stocks buoyant in this time of market uncertainty? Fears of accelerating medical costs, which underpinned volatility in the sector following the first quarter, appear to have subsided. For the most part, managed care stocks remain less volatile given the strong industry fundamentals and government’s continued support of third-party participation in Medicare. Nonetheless, investors remain sensitive to any signs of weakness amongst the commercial MCOs without significant exposure to Medicare Part D. Some of your sectors look better from a long-term perspective. What are some of your growth projections for things like managed care and medical services over the next year or two? Despite several common themes, the healthcare sector is non-homogenous and largely defined by differing levels of public and private participation and government subsidization, with the managed care sector a major case in point. With regard to managed care in particular, we believe the shift towards private provider participation in the areas of Medicare and Medicaid will continue to drive both earnings and sentiment over the medium term. Notwithstanding unexpected inflationary pressure and further industry consolidation amongst MCOs, we anticipate earnings growth in the mid-teens over the next two years. Medical services also stand to benefit from the aging of the population and are similarly exposed to government health policy through reimbursement risk. Niche medical service providers such as NovaMed (NOVA) remain at the high end of the spectrum, with expected growth projections in the high teens driven by economies of scale and less exposure to uninsured groups. To read the complete Analysts Interview, click here. Chris Kallos is a senior analyst covering the healthcare and managed care sectors for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include China Mobile (CHL), ACADIA Pharmaceuticals (ACAD), Consolidated Graphics (CGX) and AmBev (ABV). To see their latest posts, click here. Xilinx, Inc. (XLNX) - Attractive Entry Point. For full Zacks research report, click here. U.S. Cellular (USM) - Risk & Uncertainty. For full Zacks research report, click here. The Week of August 7 Earnings Data: No Recession Soon Find out which stocks have been recently upgraded by Zacks Equity Research: click here. Read the reports on all of the stocks on the Zacks Equity Research Buy List: click here.
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: Upgrades and Revisions This strategy focuses primarily on Positive EPS Estimate Revisions and Brokerage Rating Upgrades. Over the last 20 years Zacks Investment Research has proven that "earnings estimate revisions are the most powerful force driving stock prices." Studies have also shown that stocks receiving upward EPS revisions tend to receive additional upward revisions in the future. Then consider that stocks receiving these upward revisions generally have brokers upgrading their Ratings, which is also a proven mover of stock prices. There are other parameters to this strategy, but the Rating Upgrades and positive EPS Revisions are the two powerful active ingredients. This screen focuses on EPS Revisions, along with Broker Ratings and Rating Changes. According to Zacks Investment Research "earnings estimate revisions are the most powerful force impacting stock prices". Couple that with the proven benefits of upgrades in ratings from brokerage firms and you have a strategy that delivered a +27% return in 2005. Here are four stocks that make the grade for the PEG Ratio Profit Track: Aleris International, Inc. (ARS), a Zacks #1 Rank (Strong Buy) company, recently announced that second-quarter adjusted earnings per share was a record $1.40. The result compares to last year’s 96 cents and tops the consensus estimate by almost 13%. Aleris International delivered earnings per share growth of 115% over the past five years. Continue your research on ARS at: http://at.zacks.com/?id=2290. Epicor Software Corp. (EPIC) recently released its second-quarter report, stating that the results exceeded its expectations for total revenue, non-GAAP EPS and cash flow from operations. The company also noted that it is increasing its full year 2006 consolidated revenue guidance and its non-GAAP EPS guidance. Total revenues for the second quarter increased 40.2% to a record $99.5 million, versus the previous year’s $71.0 million. Quarterly earnings per share were about 21% ahead of the consensus estimate. EPIC has seen earnings per share growth of 78% over the past five years. Continue your research on EPIC at: http://at.zacks.com/?id=2291. Helix Energy Solutions Group, Inc. (HLX), another Zacks #1 Rank (Strong Buy) name, has experienced earnings per share growth of 60% over the past five years. The company recently posted second-quarter earnings of 83 cents per share, surpassing analysts’ expectations by nearly 14% and outperforming the year-prior quarter. HLX commented that it had a record quarter on the back of continuing improvement in the market place for its contracting services. The company also reiterated that it expects 2006 earnings to fall in the higher range of $3.20 - $3.70 per share. Wall Street is forecasting $3.41, up 10 cents from one week ago. Continue your research on HLX at: http://at.zacks.com/?id=2292. IPSCO Inc. (IPS), also a Zacks #1 Rank (Strong Buy) company, satisfies the criteria for this Profit Track as evidenced by its earnings per share growth of 338% over the past five years. In late July, the company reported second-quarter earnings of $3.25 per share, which beat the consensus estimate by approximately 18% and outpaced the year-prior total. Sales were a second quarter record $893.6 million, and represented a 29.9% year-over-year increase. Continue your research on IPS 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. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Kevin Matras goes over a screening strategy for finding cheap stocks with big returns: 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 – Corrections Corporation of America (CXW) Corrections Corporation of America (CXW) has exceeded earnings estimates for four consecutive quarters. All four analysts raised their estimates for this year. Over the past week, this year's estimates have increased 5.7% to $2.40 per share, while next year's numbers have also jumped 5.7%. The stock is trading at 22.1x next year's estimates, slightly above the projected long-term growth rate of 20%, giving the stock a PEG ratio of 1.10. Read the full analysis on CXW at: http://at.zacks.com/?id=2505. Sunoco, Inc. (SUN), a Zacks #1 Rank stock, topped the Street’s earnings expectations in seven out of the past nine quarters by an average margin of 19.8%. Consensus estimates are on the rise for this quarter and the full year of 2006. The Board of Directors recently approved a quarterly dividend of 25 cents per share and a $500 million increase to its share repurchase program. SUN has a return on equity of 57%, compared to 32% for the industry average. Read the full analysis on SUN at: http://at.zacks.com/?id=2506. More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Momentum – OMI Corporation (OMM) It’s been eleven trading sessions sinceOMI Corporation (OMM) delivered its Jun 2006 results, and the stock is still going strong. On Jul 25, the company reported earnings of 78 cents versus 55 cents last year, a 20% positive surprise over the consensus estimate. Sales grew 28.2% to $183.3 million and income grew 35.7% to $53.73 million. With the Jun 2006 results, it’s now been eight straight quarters since OMM disappointed. Read the full analysis on OMM at: http://at.zacks.com/?id=2507. CryptoLogic, Inc. (CRYP), a Zacks #1 Rank stock, beat the Street’s earnings estimate in the past five quarters by an average margin of 15.4%. Earnings per share are expected to grow 20.0% over the next 3-5 years. Consensus estimates for this year and next are trending higher. The company is currently yielding 2.2% and has a return on equity of 31%, compared to 3% for the industry average. Read the full analysis on CRYP at: http://at.zacks.com/?id=2508.
4. FEATURED EXPERTS Here we cast the spotlight on timely Featured Expert commentaries that recently appeared on Zacks.com.
Kevin Kennedy recaps Nasdaq’s performance over the past eight years. Learn what he discovered and check out a stock. http://at.zacks.com/?id=3089.
Richard Moroney looks at small-cap stocks that delivered impressive results. Read his analysis and check out some of his Buy List holdings. http://at.zacks.com/?id=2366.
Walter Frank sees the economy moving below its speed limit into next year. Learn what that means and discover a mutual fund. http://at.zacks.com/?id=2463. 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% |
| SUPPORTCOM I | SPRT | 3.75% |
| UNISYS CORP | UIS | 3.31% |
| SHORETEL INC | SHOR | 3.22% |
| GREEN MOUNTA | GMCR | 3.13% |
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