Friday - October 6, 2006
 Want to view the archive of past issues? Click here. Manage Profit from the Pros subscription: 1. ZACKS RANK BUY STOCKS Zacks #1 Ranked stocks average a 32.4% annual return. Every day on Zacks.com we highlight four new 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 – ON Semiconductor (ONNN) ON Semiconductor (ONNN) has seen earnings estimates for this year and next soar over the past 90 days. Over that time period, this year's numbers have jumped 30.4% to 73 cents per share, while next year's estimates have increased 27.3% to 84 cents per share. The stock is cheap at 7.1x next year's estimates, well below the long-term growth rate of 20%, giving the stock a PEG ratio of 0.36. Read the full analysis on ONNN now! More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Brinker International, Inc. (EAT) beat analysts’ earnings expectations in seven out of the past eight quarters. Earnings per share are forecasted to grow 15% over the next 3-5 years. Analysts have been upping their profit forecasts for both this year and next. EAT opened 43 new system restaurants during the fourth quarter and 159 for the entire year. This Zacks #1 Rank stock has a current dividend yield of 1.0%. Read the full analysis on EAT now! Momentum – Bebe Stores (BEBE) Red-hot Bebe Stores (BEBE) is scheduled to release earnings for the September quarter on Oct 25. Analysts are forecasting EPS of 20 cents, up 43% from the same quarter in 2005. Sales are expected to be $153.37 million. Read the full analysis on BEBE now! Allis-Chalmers Energy, Inc. (ALY), a Zacks #1 Rank stock, crushed analysts’ earnings expectations over the past two quarters by an average margin of 78.3%. The company increased revenues and expanded gross margins for the past six years. Consensus estimates have shot upward over the past 60 days. ALY’s recent acquisitions should help fuel future growth. The company has a price-to-book ratio of 2.6, compared to 5.3 for the market. Read the full analysis on ALY now!
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: AEGON NV (AEG) satisfies the criteria for this Profit Track with a price-to-sales ratio of 0.69 and earnings per share profitability of $1.78 over the past 12 months. In early August, the company reported its performance in the first six months of 2006. AEG stated that its half-year results demonstrate its continuing focus on profitability, both in terms of operating earnings and in the value of new business. The company added that it also made good progress in expanding its presence internationally. Continue your research on AEG now! Central Parking Corp. (CPC) posted fiscal third-quarter earnings in early August, noting that earnings from continuing operations for the first three quarters of the year substantially exceeded its earlier guidance, with operating results remaining firmly on plan and property-related gains well in excess of its expectations. CPC has seen earnings per share growth of $1.22 over the past 12 months and sports a price-to-sales ratio of 0.49. Continue your research on CPC now! Goodyear Tire & Rubber Co. (GT), a Zacks #1 Rank (Strong Buy) company, announced second-quarter sales of $5.1 billion, a record for any quarter and an increase of 3% from the year-ago quarter. GT’s quarterly report, which was released in early August, stated that the sales growth reflects improved pricing and product mix driven by demand for the company's branded tires in the consumer replacement markets, and the favorable impact of currency translation. Goodyear earned $1.39 per share during the past 12 months, and it offers a price-to-sales ratio of 0.13. Continue your research on GT now! Pinnacle Airlines Corp. (PNCL) released its results for the second quarter in early August. Earnings per share were about 19% above analysts’ expectations. The company has topped Wall Street estimates each time over the past five consecutive quarters. Pinnacle Airlines is another company that meets the criteria for this Profit Track with as evidenced by its price-to-sales ratio of 0.20 and earnings per share profitability of $2.43. over the past 12 months. Continue your research on PNCL now! To see the full list of stocks that currently pass this winning screen, click here. 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.” - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Great Stocks Often Have Great Peers Kevin Matras looks at how to find winning stocks in the winningest sectors. More... 3. ZACKS EQUITY RESEARCH On what might have been thought of as a reason to pop champagne corks on Wall Street, the Dow Jones Industrial Average hitting an all-time high is being viewed among certain analysts as less than wholly impressive. One such analyst is the Director of Zacks Equity Research, Dirk van Dijk, CFA. First off, what are your thoughts on the Dow reaching new highs this week? I take it with a grain of salt. For the last week or so there have been many reports in the financial press obsessing about the possibility that the Dow Industrials will hit a new record high. Much ado about nothing, if you ask me. For starters, it is only a rather oddly weighted portfolio of 30 stocks with relatively low turnover. It is not a particularly well-run portfolio; in general, if the Dow Jones drops a stock from the index it has been profitable to buy that stock and hold it for the next five years. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The S&P 500 remains well away from record territory, and don’t even ask about the Nasdaq getting back to a record. Still, the Dow was the least “bubblicious” of the major indexes during the late 1990’s, and declined the least in the 2000-03 bear market. Another way of looking at it is that it took five and a half years to get back to square one. This, despite very low interest rates and four years of very robust earnings growth. Yet compared to where we were five years ago, don’t the new highs speak of strength in the general market? Five years ago was near the bottom of the last recession, and after the Dow was already down 22% from its peak. The events of 9/11 had already occurred, and the market had taken its lumps as a result. Thus, since the Dow is now back to its peak level, it has shown 5.1% price appreciation per year over the last five years. Add in an average yield of 2.2% over the period and you get a 7.3% return. Meanwhile, inflation has averaged 2.8% over the same period, so investors in the Dow have earned a real return of 4.5%. Not very exciting, given a generally growing economy at home and a global boom. Sounds pretty average when you break it down that way. Well, even with the Dow hitting a record close, only eight of its companies are trading at a higher P/E based on 2006 earnings than their average of the last five years. Both the mean and median of the group are 11% below the average of the last five years. The average compound annual earnings growth has been 12.9% over the last five years. In other words, the average Dow company has earnings that are 83.4% higher than they were five years ago. Eight of the big 30 have posted earnings growth rates of over 20%, meaning that there earnings are at least 2.5x as large as they were five years ago. According to some reports, large-cap stocks seem have taken the reins from small-cap stocks in the market. Do you this will help the overall market stay sturdier than the last time it peaked? The short answer is that large-cap stocks really have not taken over the reins of the stock market. Since the start of September, the Russell 2000 is up 3.0% while the S&P 500 is up 2.9%. Since August 1, the Russell 2000 is up 6.3% while the S&P 500 is up 6.2%. While I will not ascribe to much significance to a 0.1% difference, it is certainly not the case that small-caps have been lagging the big-caps, rather it is a case of a rally that reaches across all capitalization categories. Where do you see things headed for companies on the Dow going forward? Growth is projected to continue into next year, with the median P/E falling to 14.4x from 16.3x this year. All but one of these firms are expected to have higher earnings in 2007 than in 2006. Sales and book value have also grown over the same period, although at lower rates than earnings. This by process of some simple arithmetic indicates that both net margins and ROE have also been expanding. Dividends have grown even faster than earnings, indicating higher payout ratios – even excluding the growth in share re-purchase, which is conceptually similar to dividends. Dirk van Dijk, CFA is the Director of Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include SABESP (SBS), Del Monte (DLM), Smith International (SII) and Pride International (PDE). To see their latest posts, click here. United Natural Foods - Attractive Valuation. For full Zacks research report, click here. Secure Computing Corp. - Possible Earnings Miss. For full Zacks research report, click here. Lack of Storms Helping Property & Casualty Companies Revisions Will Tell Health of the Economy 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.
4. FEATURED EXPERTS Here we cast the spotlight on timely Featured Expert commentaries that recently appeared on Zacks.com.
Paul Tracy says the global transportation industry offer an attractive one-two punch for investors. Benefit from his analysis. More...
Nadine Wong sees the biotech upswing continuing. Read her update on one company’s new products. More...
Charles Carlson discusses a company that he describes as the antidote for uncertainty. Read his profile. 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. Or view the full list of Zacks #1 Ranked stocks. 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 05/21/2013
| Company Name | Symbol | %Change |
|---|---|---|
| SCIENTIFIC L | SCIL | 8.00% |
| NATUS MEDICA | BABY | 6.11% |
| SUMMER INFAN | SUMR | 6.02% |
| RADIANT LOGI | RLGT | 5.32% |
| NEW ORIENTAL | EDU | 4.51% |
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