Thursday - November 16, 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 - Tekelec (TKLC) Tekelec (TKLC) has easily surpassed earnings estimates in 14 consecutive quarters, with 12 of those periods registering at least a 10% surprise. Three analysts have raised their numbers for this year. Over the past month, this year's estimates have increased 32%. Read the full analysis on TKLC now! MetLife, Inc. (MET), which was first featured as a Growth and Income pick on Jun 15, is up nearly 15%. The company topped the Street’s earnings estimate for the past nine quarters by an average margin of 13.1%. Earnings per share are projected to grow 11% over the next 3-5 years. The Board of Directors declared an annual dividend of 59 cents per common share of stock on Oct 24. MET is currently yielding 1.0%. Read the full analysis on YUM now! More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Momentum - CorVel Corporation (CRVL) Back in early October we wrote, “CRVL has delivered positive earnings surprises the last two consecutive quarters, so the pressure for the company to produce another surprise is growing.” Well, pressure or not, CorVel Corporation (CRVL) did indeed deliver another positive EPS surprise when the company reported second-quarter fiscal 2007 results on Nov 8. Profits came in at 51 cents per share, up 132% from last year and 34% above the consensus earnings estimate. This was CRVL’s third straight positive earnings surprise. Read the full analysis on CHL now! Atlantic Tele-Network, Inc. (ATNI) beat the Street’s third- quarter earnings estimate by 60.6% when it posted profits of 53 cents per share. Revenues soared 65.2% to $41.3 million. Consensus estimates have been on the rise for this Zacks #1 Rank stock. ATNI has a price-to-book ratio of 2.6, compared to 4.7 for the market. On Sep 18, the Board of Directors raised its quarterly dividend by 16.7% to 14 cents per share. Read the full analysis on ATNI now!
2. ZACKS CHALLENGE: TOP PLAYER INTERVIEW Zacks.com features a free investment simulator where our customers can prove their stock picking skills to the rest of the world. In these articles we will share with you the insights and recommendations from Top Simulator Players. Learn more about the current Zacks Challenge. Donpow Don Powers is somewhat of a chartist, who is partial to technology and does not believe in day trading. This investor looks for stocks that have the potential to at least double in a year. Don’s investing prowess has so far guided his Simulator portfolio into the top 20 in the Zacks 4th Quarter Stock Challenge, with an overall return that is on the verge of hitting 40%. Some of his plays include ATVI, BRCD, AUY, PKTR and MRVL. Click here to check out this participant's complete trading history. What is his plan of attack? “Typically I look for companies that are depressed due to temporary circumstances such as an acquisition, temporary disruption say due to supply delays, or delay in new product introductions etc. I am especially attracted to technology stocks where this happens often. I am an ardent believer in charting which helps me to locate bottoms and buy points,” stated Don. The stock market enthusiast added, “Once I choose to buy a stock, I look at the sector, business, key statistics, concentration on ROE (return on equity), profitability, PEG, cash position and flow.” Basically, there has to be growth or potential for growth. Don explained that the his picks have a high growth rate or are from growing sectors or, of course, both. Once this disciplined stock picker finds what he likes, he doesn’t necessarily invest full throttle. Don commented, “I invest 1/3 of my buy and watch for points of weakness to continue to add to my position. This enables me to accumulate a position over time. So once I make my first buy, I hope the stock goes down to be able to build the position. It make take a few days or months to build a position.” Does he have a portfolio “darling?” One stock that has generated the most bang for his buck is PKTR. This Simulator contender sees a lot of bullishness in this company. Don described PKTR, pointing out that it is the leader in WAN (wide area network) problems, controlling and analyzing traffic over the network. “Because so many employees, students, etc. are downloading bigger and bigger files over their company’s or school's network, traffic slowdown has become a major problem for all companies. PKTR has the only full solution for this problem,” said Don. He went on to explain that other players in this field include RVBD, CSCO, JNPR and F5. However, according to Don, PKTR is the best buy in this arena. He noted, “RVBD's valuation is 3x PKTR, yet they are half the size. PKTR is a screaming buy and should be selling in the high teens or in the twenties. PKTR is and has been profitable and growing fast. Outlook for this sector is huge.” What does the future hold? The election results have caused this market player to have a dimmer outlook on the market. Don mentioned that he is concerned about the tax situation in 2010 and the does not see a huge upswing for the Dow for the remainder of this year. He is, however, in the bullish camp when it comes to the Nasdaq and emerging markets, especially India, China, South Africa and Indonesia. Any advice? “My advice for someone new to investing is to get a simple book on charting. They are available in the book stores. There are some very basic patterns that anyone can learn. It will help you to time your purchases and sales. Use the simulator and practice, practice, practice. You not need to day trade. That is counter productive, takes too much time and in the end will not make you much money,” replied Don. It’s free. Its fun. It's the place to show your investing prowess. The best stock pickers will be rewarded with thousands of dollars in prizes. Learn more. Trade Options? Then sign up for the Zacks Options Challenge. 3. ZACKS EQUITY RESEARCH Two highly anticipated video game systems will be making their U.S. debut in few days. Sony’s (SNE) next generation console, PlayStation 3, will be available on Friday, Nov 17. Nintendo’s (NTDOY) new system, Wii, will be released on Sunday, Nov 19. Both systems are expected to give the video game industry a boost. Investors looking to take advantage of the hoopla surrounding the release of the PlayStation 3 and the Wii may want to research THQ (THQI). The video game maker is a Zacks #1 Rank (“strong buy”) stock and recently exceeded earnings expectations. THQ generated fiscal second-quarter profits of 19 cents per share, 20 cents above expectations. (Analysts had forecast a loss of a penny per share.) Net sales rose 68% to $240.2 million, aided by strong sales of Saints Row and Cars. Looking forward, THQ anticipates generating net sales this fiscal year of $925 million to $975 million, versus previous guidance for sales of $900 million to $950 million. Earnings are expected to come in a range of 95 cents to $1.05 per share, excluding stock option expense of 18 cents per share. Four covering analysts adjusted their estimates in response to the revised guidance, resulting in a three-cent increase in the consensus estimate to 83 cents per share. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Video game maker Activision (ATVI) is also on the Zacks #1 Rank List. The company announced last week that fiscal second- quarter revenues totaled $188.2 million, a decrease from a year prior, but far above the company’s projection of $130 million. ATVI also reaffirmed its previously raised guidance for fiscal 2007 revenues of $1.15 billion. However, the company withheld earnings data pending an internal review of historical stock option practice. (The Zacks Rank is a quantitative model that does not consider external factors such as a delay in reporting earnings.) Both THQI and ATVI are classified in Toys/Game/Hobby, a group I featured on Oct 25 following positive reports from Hasbro (HAS) and Mattel (MAT). Over the past few weeks, analysts have become even more bullish on HAS, pushing the consensus estimates for 2006 and 2007 up to $1.26 and $1.47 per share, respectively. When the company was last featured, analysts were anticipating profits of $1.22 and $1.44 per share, respectively. The consensus estimates for MAT have also been adjusted: $1.29 (a one-cent increase) and $1.42 (a two-cent increase) per share for 2006 and 2007, respectively. HAS is a Zacks #1 Rank stock and MAT is a Zacks #2 Rank (“buy”) stock. Last week, I highlighted Textile Apparels. During the past seven days, another company within this group was added to the Zacks #1 Rank List, Polo Ralph Lauren (RL). Polo Ralph Lauren was added to the prestigious list after delivering a very good fiscal second-quarter earnings report. The company’s profits totaled $1.28 per share, easily surpassing expectations for profits of $1.06 per share. Revenues, exclusive of the Polo jeans acquisition, grew 9%. (Overall revenues grew 14% to $1.17 billion.) More impressively, operating margins widened by 120 basis points to 18.4%. Both wholesale and retail sales drove topline growth and various initiatives helped to contribute to the better margins. RL expects the positive momentum to continue and increased its guidance for fiscal 2007 profits to a range of $3.50 to $3.60 per share, from $3.25 to $3.35 per share. Textile Apparel also contains another maker of luxury consumer goods, Coach (COH). COH is a Zacks #2 Rank stock. A few weeks ago, the company reported fiscal first-quarter profits of 34 cents per share, three cents above analysts’ expectations and four cents above the company’s own guidance. Net sales rose to $554 million, thanks in part to what Coach described as “rapid growth” in the premium handbag market. The company also raised its guidance for fiscal 2007 earnings to “at least” $1.63 per share. Nearly all of the covering analysts adjusted their forecasts in response, causing the consensus estimate to rise to $1.65 per share, from $1.57 per share. To read the complete Analysts Interview, click here. Charles Rotblut, CFA is the senior market analyst for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include TXU Corporation (TXU), Rudolph Technologies (RTEC), NVIDIA (NVDA) and Nordstrom (JWN). To see their latest posts, click here. Alliant Energy (LNT). - Positive Trends to Continue. For full Zacks research report, click here. ProQuest (PQE) - Restatements Expected. For full Zacks research report, click here. Third-Quarter Earnings Season Drawing to a Close Select European Stocks with Care 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. 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: Recent Price Strength This screen looks for stocks trading in the upper range of their 52-week highs along with attractive Zacks Rank and Broker Ratings. This strategy proves that the "trend is your friend" with a +35.5% return versus +4.9% for the S&P 500 in 2005. AAON Inc. (AAON) recently established a new 52-week high. The company also recently reported record earnings and sales. Third-quarter earnings per share totaled 43 cents, which was ahead of last year’s 22 cents and above the consensus estimate by almost 23%. The company stated that the increase in earnings resulted primarily from both higher volume and price increases, which provided an improvement in gross margins in the third quarter. AAON has advanced in share price by 20% over the past four weeks. Continue your research on AMWD now! Compass Minerals International, Inc. (CMP), a Zacks #1 Rank (Strong Buy) company, recently announced third-quarter earnings of seven cents per share, reversing the year-prior loss and topping the consensus estimate by 200%. Compass Minerals International has outpaced analysts’ expectations each time over the past five consecutive quarters. CMP has been setting new 52-week highs and has increased by 12% over the past four weeks. Continue your research on CMP now! Cholestech Corp. (CTEC) is within reach of its 52-week high and experienced 42% growth over the past four weeks. In late October, the company posted fiscal second-quarter earnings of 15 cents per share, topping the previous year's 11 cents and eclipsing the consensus estimate almost 37%. The company said this past quarter and the first half of fiscal 2007, Cholestech has demonstrated significant operating leverage in addition to double digit revenue growth. This fact is reflected in the company's improved operating margin and continued strong cash flow. Continue your research on CTEC now! Diversa Corp. (DVSA) recently released its report for the for the quarter and nine months ended September 30, 2006. The company commented that it is pleased with the progress it has made on the goals it set for 2006. So far, among other accomplishments, DVSA has delivered on its promise to reduce costs, conserve cash, concentrate on bringing new products to market, and increase penetration of its existing products. Diversa meets the criteria of this Profit Track as its share price has experienced 13% growth over the past four weeks and is currently near its 52-week high. Continue your research on DVSA 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”. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Diversification and Portfolio Weighting Kevin Matras talks about diversification and the importance of an equally dollar weighted portfolio: Click here. 5. ZacksAdvisor.com TIMELY BUY of the WEEK Here you'll discover a Zacks #1 Rank stock hand selected by Ben Zacks to outperform the market over the next 30 to 90 days. This week's Timely Buy is...
AT&T, Inc. (T), through its subsidiaries, provides telecommunication services in the United States and internationally. It provides Internet protocol (IP)-based communications services for businesses, including a portfolio of virtual private network, voice over IP, and other offerings. The stock has dipped slightly on uncertainty regarding the merger with BellSouth and fears that the FCC will become less friendly as the Democrats gain power in Congress. Meanwhile, the company keeps inking deals and boosting the bottom line. This week, T announced a new contract with American Alloy Steel, a leading distributor in the steel service industry with headquarters in Houston, Texas. Under the terms of the three-year contract, AT&T will be the primary provider of networking services. The company said in mid-October third-quarter earnings rose 74% to $2.17 billion, above Wall Street estimates, boosted by last year's acquisition of its former corporate parent as well as strong growth and profit margins at Cingular Wireless. Earnings per share came in at 63 cents, beating the 58 cent estimate. The company also provided the first subscriber numbers from its crucial foray into cable TV, saying it has signed up 3,000 of the 30,000 homes offered the new U-verse service since the limited initial launch in San Antonio during June. Cingular Wireless is the company's growth engine that has the most potential going forward. It is the largest U.S. wireless carrier, with the deepest-spectrum portfolio of any carrier in the country's largest markets, giving it the resources to roll out new services quickly. Cingular should be able to strengthen its market position as it integrates the merger with AT&T Wireless. Cingular has the financial muscle to survive and thrive in the wireless industry, and recent consolidation should improve profitability in the industry. A big part of AT&T's strategy centers around the business services market, in which it hopes the integration of SBC's local networks and the old AT&T will differentiate it against its competitors. T is upgrading the local phone network and offer new services to consumers to combat competition from cable companies. Cost-cutting is also important as competition pressures prices and revenue declines. The company is also making a push to be a leader in rural communities. T recently announced a series of initiatives to introduce broadband Internet and video services to low-income and rural communities throughout the company's 13-state local- service market. Many of these areas are not served by a landline broadband service provider today. T has great advantage in its strong balance sheet. The combined firms collectively have generated $6.3 billion in free cash flow, excluding a $2.6 billion dividend from Cingular, and the firms repaid more than $5 billion of debt last year. This financial strength will allow T to withstand the turbulence of their market.
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 Rank (Strong Buy) List has produced the following results for investors:
And just as importantly, our #5 Ranked stocks (Strong Sells) have alerted investors as to which stocks to dump from their portfolios to avoid unnecessary losses. FREE PORTFOLIO TRACKER Do you believe that these events affect stock prices?
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Zacks #1 Stocks on the Move 05/22/2013
| Company Name | Symbol | %Change |
|---|---|---|
| ALLIANCE FIB | AFOP | 9.31% |
| SONIC FOUNDR | SOFO | 7.77% |
| TRI TECH HOL | TRIT | 6.62% |
| A M R CP | AAMRQ | 4.52% |
| FLOWERS FOOD | FLO | 4.31% |
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At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1986 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1986-2011 and were examined and attested by Baker Tilly, an independent accounting firm.
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