Friday - November 3, 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 - Kendle International, Inc. (KNDL) Kendle International, Inc. (KNDL) has exceeded earnings estimates in seven out of the past eight quarters, with five of those positive surprises exceeding 10%. Year-over-year growth exploded over that time period as well. Over the past 60 days, this year's estimates have increased 4.7% to $1.33 per share, while next year's have risen 4.2% to $1.75 per share. Read the full analysis on KNDLnow! Donaldson Company, Inc. (DCI) beat the Street’s earnings estimate in four out of the past five quarters, most recently by 7.5%. On Sep 5, this Zacks #1 Rank stock reported record quarterly and full-year earnings per share, net income and revenues. Analysts have been upping their profit forecasts for fiscal 2007 and fiscal 2008. The Board of Directors raised its quarterly cash dividend by 12.5% in late July. DCI’s return on equity nearly doubles that of the industry average—25% compared to 13%.. Read the full analysis on DCI now! Mediacom Communications (MCCC) expects to announce earnings today, Nov 2, for the Sep 2006 quarter. The consensus earnings estimate is for a loss of 14 cents per share versus a loss of two cents in the same quarter last year. But there is potential for a huge surprise. MCCC delivered triple digit positive earnings surprises in four of the last 11 quarters, including a 156% surprise in the most recent Jun 2006 quarter. Read the full analysis on MCCC now! More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - United America Indemnity, Ltd. (INDM), a Zacks #1 Rank stock, topped the Street’s earnings estimate in three out of the past four quarters, most recently by 14.8%. The company reported solid results for both the third quarter and first nine months of 2006. Consensus estimates for this year and next year have been on the rise. INDM has a price-to-book ratio of 0.85, compared to 5.5 for the market. Its PEG ratio currently sits at 0.86. Read the full analysis on INDM 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: PEG Ratio This strategy uses the PEG Ratio to find attractively priced stocks poised for price appreciation. The PEG Ratio is simply the P/E (Price divided by Earnings) of a stock divided by its 5-year projected growth rate. Too often investors think of value investing being the antithesis of growth investing. The beauty of using PEG is that you can find value stocks even amongst hot growth stocks. Let’s take a closer look. A company with a P/E Ratio of 20 and a Growth Rate of 10% will have a PEG Ratio of 2.0 (20 / 10 = 2.0). While a company with a P/E Ratio of 40 and a Growth Rate of 50% will have a PEG Ratio of only 0.8 ( 40 / 50 = 0.8) The stock with the P/E of 40 is actually the better bargain since its PEG Ratio is lower (0.8) implying it’s undervalued with more upside potential. In general, a PEG value of less than 1 is considered undervalued while greater than 1 is thought to be fully valued to overvalued. The lower the PEG, the better the value, because the investor would be paying less for each unit of earnings growth. Here are four stocks that make the grade for the PEG Ratio Profit Track: Aspreva Pharmaceuticals Corporation (ASPV) recently reported third-quarter earnings of 71 cents per share, soaring past last year's nine cents and surpassing the consensus estimate by a penny. Aspreva Pharmaceuticals managed to exceed analysts’ expectations four times out of the past five consecutive quarters and matched the other time. ASPV has a PEG ratio of 0.26. Continue your research on ADVS now! Lufkin Industries, Inc. (LUFK) recently announced third-quarter earnings of $1.15 per share, surpassing the year-prior total of 76 cents and beating the consensus estimate by a penny. Revenues for the third quarter were up 28.4%, compared to the previous year’s result. Lufkin Industries satisfies the criteria for this Profit Track as evidenced by its PEG ratio of 0.55. Continue your research on LUFK now! The Manitowoc Company, Inc. (MTW) recently released third-quarter results, noting that it posted its third consecutive quarter of record net sales and earnings. Net sales increased 38% to $779.0 million from last year’s $564.9 million. Earnings from continuing operations, excluding special items, were 82 cents per share. The result eclipsed the consensus estimate by about 12% and outperformed the year-ago quarter. MTW's PEG ratio is 0.38. Continue your research on MTW now! Superior Energy Services, Inc. (SPN) can be an attractive value investment as its PEG ratio currently stands at 0.40. The company recently reported third-quarter earnings of 68 cents per share, jumping ahead of analyst’s expectations by nearly 10% and topping the year-ago total of 14 cents. Superior Energy Services mentioned that all business units performed very well. Continue your research on SPN 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.” - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - A Relative Price Strength Screen for All Markets Kevin Matras goes over a Relative Price Strength strategy for finding winning stocks in all markets. More... 3. ZACKS EQUITY RESEARCH As earnings season for the third quarter winds its way towards completion in the next couple weeks, we noticed a slew of healthcare stocks coming out with reports recently. For how this industry has been performing compared with what had been expected, we spoke with senior healthcare analyst Chris Kallos. With many of the HMOs in your coverage having recently reported Q3 earnings, how has this quarter been performing compared to expectations? Our investment outlook remains neutral based mainly on current valuations and few surprises in the quarterly earnings releases, as expected. That said, we will be looking for enrollment growth given the introduction of Medicare Part D earlier this year and the impact of current competitive pricing. At this time, we consider Wellpoint (WLP), given the strength of the Blue Cross Blue Shield brand and capacity to exploit economies of scale and scope, to still represent the best value in this particular space. Within the healthcare industry, where do you see most of the growth coming from? More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - For the longer term, we continue to think that demand for most services offered by healthcare companies, including home healthcare, rehabilitation services, clinical laboratory services, and dialysis, will be driven by favorable demographic trends of an expanding population and, in particular, the wave of aging Baby Boomers. How are valuations with these companies? How about with the HMOs? With a few exceptions, valuations overall remain high and justify our neutral stance. This goes for home healthcare and rehabilitation services as well as HMOs, though I will note we retain our Buy recommendation on Chemed Corp. (CHE). Upon any significant pullback in the market, however, we would re-evaluate our stance on a number of names, including Amerigroup Corp. (AGP), Health Net, Inc. (HNT) and VistaCare, Inc. (VSTA). What are your top Buy recommendations at this time? Our top pick in the sector remains Wellpoint (WLP) given its business mix, market share and potential to improve operating efficiencies. We also have a Buy on Aetna (AET), one of the oldest and strongest HMOs. Shares of Aetna have risen over 6% since we upgraded the stock to a Buy this summer. With investors eyeing healthcare over the long term, would now be a good time to get in, or would waiting be better? Notwithstanding our neutral stance given current valuations, over the long term we remain positive with the sector’s potential to grow earnings, given favorable underlying demographic trends. That said, 3Q06 has historically been the most challenging quarter for most companies, and in our opinion may present selective opportunities for investors. Chris Kallos is a Zacks analyst covering sections of the healthcare industry. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include Northrop Grumman (NOC), Grey Wolf (GW), ArthroCare (ARTC) and NDS Group (NNDS). To see their latest posts, click here. CoTherix, Inc. - Catalyst for Growth. For full Zacks research report, click here. Sony Corporation - Competition Increasing. For full Zacks research report, click here. Cosmetics Companies Prompting Interest Positive Revisions Return 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.
Ian Wyatt highlights three companies - one of which likes the new law signed by President Bush. Read this expert's portfolio update. More...
John Reese's Hot List is leading the S&P in three categories. Check out the returns and discover a few stocks. More...
Richard Moroney explains that a good defense can score points on Wall Street. Check out some `defensive' stocks. 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 05/23/2013
| Company Name | Symbol | %Change |
|---|---|---|
| WESTELL TECH | WSTL | 6.67% |
| A M R CP | AAMRQ | 4.32% |
| MAXWELL TECH | MXWL | 3.94% |
| ALLIANCE FIB | AFOP | 2.94% |
| SYNAPTICS IN | SYNA | 2.87% |
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