Monday - November 27, 2006

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Zacks #1 Rank 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 - Crocs, Inc. (CROX)

Earnings estimates for Crocs, Inc. (CROX) have gone through the roof over the past 90 days. This year's numbers have soared 91.3% to $1.53 per share, while next year's estimates have leapt almost 100% to $2.00 per share over that time period. All six analysts have raised their projections for this year and next. The company has only been public for three quarters, but it has exceeded estimates in each of them by an average of about 34%. Read the full analysis on CROX at http://at.zacks.com/?id=2510

Growth & Income - Principal Financial Group, Inc. (PFG)

Principal Financial Group, Inc. (PFG) beat analysts’ earnings expectations in nine straight quarters and in 14 out of the past 15. Analysts have been upping their earnings estimates for both this year and next. The Board of Directors recently raised its annual common stock dividend by 23.1% to 80 cents per share from 65 cents. PFG has a current dividend yield of 1.4% and a five-year average dividend yield of 0.83%. Read the full analysis on PFG at http://at.zacks.com/?id=2511

More...

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Zacks Rank continued...

Momentum - Check Point Software Technologies, Ltd. (CHKP)

Check Point Software Technologies, Ltd. (CHKP) reported third-quarter earnings per share at 31 cents. The result was down from last year’s 32 cents; however, it amounted to a 10.7% positive surprise over analysts’ consensus estimates. Exceeding analysts’ expectations has become somewhat of a habit for CHKP of late, as the company has managed to do so in eight of the last nine quarters. Read the full analysis on CHKP at http://at.zacks.com/?id=2512

Value - MCG Capital Corporation (MCGC)

MCG Capital Corporation (MCGC), a Zacks #1 Rank stock, topped the Street’s earnings estimate for the past four quarters by an average margin of 17.9%. Consensus estimates for both this year and next have been on the rise. The Board of Directors recently declared a quarterly dividend of 42 cents per share. The company has a price-to-book ratio of 1.5, compared to 4.9 for the market. Read the full analysis on MCGC at http://at.zacks.com/?id=2513

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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: Discounted Fundamental Strength

This Profit Track identifies stocks with strong underlying fundamentals and low valuations. These are companies with solid balance sheets and a history of profitability that are reasonably priced. Although conservative in approach, this strategy has generated double-digit returns for five consecutive years, including a 23.5% gain in 2005.

Here are four stocks that make the grade for the Discounted Fundamental Strength Profit Track:

Arrow Electronics, Inc. (ARW) recently announced third-quarter adjusted earnings of 71 cents per share, outperforming last year’s 52 cents and exceeding the consensus estimate by a penny. The company mentioned that it again delivered strong results across all of its businesses, further demonstrating its consistent record of executing on the fundamentals of its business strategy. ARW offers a PEG ratio of 0.84 and a price/sales multiple of 0.30. Continue your research on ARW at http://at.zacks.com/?id=2254

Cummins Inc. (CMI) recently reported its most profitable third quarter in the company’s history. Earnings per share totaled $3.37, topping the year-ago total of $2.90. The company stated that its continued strong financial performance has allowed it to create a strong balance sheet. As a result, CMI is well positioned to withstand the challenges of the business cycle and invest in growth opportunities that will be the key to its future success. Cummins has a current ratio of 1.79 and a debt/equity level of 0.30. Continue your research on CMI at http://at.zacks.com/?id=2255

ENGlobal Corporation (ENG) satisfies the criteria of this Profit Track with a current ratio of 2.02, a debt/equity level of 0.37, a PEG ratio of 0.66 and price/sales multiple of 0.63. The company, a leading provider of engineering services, recently released its financial results for the third quarter. Revenues totaled $82.5 million, which is an increase of 39.2% over the year-prior quarter. Continue your research on ENG at http://at.zacks.com/?id=2256

Powell Industries, Inc. (POWL) posted fiscal third-quarter results in early September. The company noted that with its strengthening backlog and new acquisitions, it expects to continue its positive growth trend. POWL expects fourth-quarter earnings per share to range between 12 cents and 17 cents. The company’s fiscal 2006 expectation is between 75 cents and 80 cents. Both sets of forecasts are in line with analyst expectations. Current Wall Street estimates for the fourth quarter stand at 17 cents, which is three cents above two months-ago levels. Fiscal year-end estimates are currently 80 cents per share, an increase of two cents over the past 60 trading days. POWL sports a debt/equity level of 0.11 and a PEG Ratio of 0.70. Continue your research on POWL at http://at.zacks.com/?id=2257

To see the track details for this winning screen, go to http://at.zacks.com/?id=2258

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=2307

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SCREEN OF THE WEEK

The Importance of Screening and Backtesting

Kevin Matras goes over the importance of Screening and Backtesting. Find out how to increase your odds for success: http://at.zacks.com/?id=2259 

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November 24th, commonly referred to as Black Friday, officially kicked off the holiday shopping season. This week, analysts will be keeping a close eye on holiday sales and signs of consumer strength or weakness. It will be interesting to see if promotions and expanded hours equate to better sales for retailers. Will consumers be willing to spend this holiday season despite a slowing but still steady economy?

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Zacks Equity Research continued...

The number of earnings reports scheduled for this week is fairly light. As of Friday morning, there are just 40 confirmed earnings reports scheduled.

Companies That Could Surprise During the Week of Nov 20-24

Aeropostale, Inc. (ARO) announced on Nov 2 that October sales at stores open at least one year rose 5.6%. Analysts on average had expected a jump of 3.9%. Total net sales for the four weeks ended Oct 28 increased 18.3% to $99.2 million, compared to $83.9 million for the four-week period ended Oct 29, 2005. The strong results prompted ARO to raise its third-quarter earnings per share guidance to between 60 and 61 cents per share, compared to its prior outlook which called for profits between 58 and 59 cents. Over the past 30 days, the consensus estimate for this quarter jumped two cents to 61 cents. Aeropostale will report on Wednesday, Nov 29, before the open of trading.

Donaldson Company, Inc. (DCI) reported its 17th consecutive record year in early September, with earnings per share, net income and sales hitting new highs. Fourth-quarter fiscal 2006 profits came in at 43 cents per share, three cents above analysts’ expectations. Furthermore, the result was 10.3% better than earnings in the prior-year period. The company also set its profit guidance for 2007 above analysts' expectations. The consensus estimate for this quarter currently sits at 43 cents—a penny better than the consensus of 30 days earlier. Donaldson will report first-quarter fiscal 2007 results on Monday, Nov 27, after the close of trading.

MORE FROM ZACKS EQUITY RESEARCH...

Analyst Blog
Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include United Retail Group (URGI), GATX Corporation (GMT), El Paso (EP) and Freeport-McMoRan Copper & Gold (FCX). See their latest posts at http://at.zacks.com/?id=2589


BULL OF THE DAY
United Retail Group (URGI) – Good Entry Position. Full Zacks research report at http://at.zacks.com/?id=2250

BEAR OF THE DAY
Bank Mutual (BKMU) – Downward Pressure. Full Zacks research report at http://at.zacks.com/?id=2251

ZACKS ANALYST INTERVIEW
Biotechs to Begin Profitability
The biotech industry will deliver the next generation of targeted therapies for cancer, AIDS, cardiovascular diseases and other life-threatening diseases: http://at.zacks.com/?id=2723


EARNINGS TRENDS
2006 Estimates Rising
With earnings season just about over, upward revisions for 2006 are outpacing cuts: http://at.zacks.com/?id=2252

Rating Upgrades - New! (Premium)
Find out which stocks have been recently upgraded by Zacks Equity Research: http://at.zacks.com/?id=2959

Zacks Equity Research Buys - New! (Premium)
Read the reports on all of the stocks on the Zacks Equity Research Buy List: http://at.zacks.com/?id=2960

****************************************************************

Learn More about Zacks Equity Research at
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Full access to Zacks Equity Research is now available on
Zacks.com: http://at.zacks.com/?id=2961

Zacks Wealth Management: Own all the Zacks #1 Rank stocks in a
portfolio managed by Zacks. Learn more at
http://at.zacks.com/?id=2699

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What is Wall Street saying about your stocks? You'll find the answer in our exclusive Research Digest reports. Everyday we provide three new free reports on Zacks.com. The rest are made available to our Zacks Premium members.

Today's free reports are:

AutoZone, Inc. (AZO)
AZO is the largest retailer of automotive parts and accessories.
http://at.zacks.com/?id=2962

Hewlett-Packard Co. (HPQ)
HPQ provides computing, imaging, printing systems and information technology services for home and corporate use.
http://at.zacks.com/?id=2963

Reliance Steel & Aluminum Co. (RS)
RS is one of the largest metals service center companies.
http://at.zacks.com/?id=2964

See all Research Digest Reports (Premium)
http://at.zacks.com/?id=2965

Broker Research Resources

All Star Analyst Portfolio
These are the best stock picks from the best stock pickers on Wall Street (aka 5 Star Analysts)
http://at.zacks.com/?id=2966

Broker Rating Upgrades
Find out which stocks brokers have recently upgraded.
http://at.zacks.com/?id=2967

5. FEATURED EXPERTS

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Here we cast the spotlight on timely Featured Expert commentaries that recently appeared on Zacks.com.


Too Skeptical?
Jack Adamo expresses his concern over the housing market and provides updates on a few stocks. Benefit from his insight.
http://at.zacks.com/?id=2429


Hot List Hits Another Trifecta
John Reese provides a mid-month update on his Hot List. Take a look at the numbers and a few stocks.
http://at.zacks.com/?id=2404


Data Heaven
Discover what Gregory Spear has to say about recent CPI and PPI data. Then check out a few stocks.
http://at.zacks.com/?id=2537
 

OTHER TOOLS FROM ZACKS

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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 generated the following results for investors:

• +31.8% average annual return since 1988 versus +11.8% for S&P 500
   
• Outperformed S&P 500 in 17 of the last 18 years* +43.8% total return from 2000 to 2002 - the worst
  bear market in over 60 years.
   
• +18% in 2005

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=2309

Or view the full list of Zacks #1 Rank (Premium) stocks at
http://at.zacks.com/?id=2266

FREE PORTFOLIO TRACKER

Do you believe that these events affect stock prices?

* Broker Recommendation changes
* Earning Estimate revisions
* Earnings Announcements
* Zacks Rank changes

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 and improve your portfolio's performance. Did we mention it's free? Get started now by going to 
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Regards and Happy Investing,

Charles Rotblut, CFA

Senior Market Analyst
Zacks.com

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*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.

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