Tuesday - December 5, 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 31.8% 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 - ZOLL Medical Corporation (ZOLL) More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Momentum - Regal Beloit (RBC) There is an old saying that ‘cream rises to the top of the bottle’, meaning that good stocks eventually are recognized. After Regal Beloit (RBC) as a Zacks Momentum Stock of the Day on Apr 27, 2006 we said “Once RBN is able to conquer overhead resistance at about $30, there really is not overhead resistance in this stock until the all time high of $40.50 set on Dec 18, 1997”. The stock cleared that $40.50 level on Oct 23 but failed to close above that level. RBN did mange to close above the old highs on Nov 13. With this old resistance cleared, it’s obvious that the line of least resistance is to the upside for this stock. Read the full analysis on RBN now! Since we first highlighted Assurant, Inc. (AIZ) as a Value pick on Feb 1, the stock is up nearly 21%. On Nov 1, the company surprised to the upside by 21.2% when it posted third-quarter earnings per share of $1.20. Compared to the prior-year period, earnings soared 30.4%. Consensus estimates for this quarter and for the full year jumped 6.8% and 5.2%, respectively, over the past 30 days. Read the full analysis on AIZ now! Find the best-performing stocks within the Zacks #1 Rank list each week. Last week’s top performers include Gulf Island Fabrication (GIFI) with a 15.6% gain.
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: 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. Globecomm Systems Inc. (GCOM) is trading within reach of its 52-week high and experienced 3% growth over the past four weeks. In early November, the company reported fiscal first-quarter earnings of six cents per share, topping the year-ago total of five cents and jumping ahead of the consensus estimate by 500%. Globecomm Systems noted that the future is bright and it looks forward to an exciting year. Read the full analysis on GCOM now! Hercules Inc. (HPC), a Zacks #1 Rank (Strong Buy) company, announced third-quarter net income from ongoing operations of 36 cents per share. The result outperformed last year’s 22 cents and exceeded the consensus estimate by 20%. The company commented that its people continue to deliver excellent results with strong growth in sales, earnings and cash flow. HPC has advanced in share price by 3% over the past four weeks and currently trades near its 52-week high. Read the full analysis on HPC now! Perini Corp. (PCR), another Zacks #1 Rank (Strong Buy) name, is close to its 52-week high. PCR’s share price increased by 14% over the past four weeks. In early November, the company posted third-quarter earnings of 36 cents per share, eclipsing the year-ago total of 22 cents and outpacing the consensus estimate by 20%. Perini Corp. increased its earnings per share guidance from a previous range of $1.00 to $1.10 to a range of $1.10 to $1.20. Analysts are in agreement as evidenced by current 2006 forecasts of $1.16 per share. One month ago, Wall Street was predicting $1.07 per share for 2006 earnings. Read the full analysis on PCR now! Synchronoss Technologies, Inc. (SNCR) has experienced approximately 41% growth over the past four weeks, which is the highest four-week rate of growth currently listed under this Profit Track. The company’s shares are trading near a 52-week high. Synchronoss Technologies released its results for the third quarter in early November. Earnings per share totaled 10 cents, which is nearly 67% above Wall Street projections of six cents. The company mentioned that the third quarter was highlighted by better than expected revenue and profitability. Read the full analysis on SNCR 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 With an acceleration of mergers, acquisitions and licensing going on in the pharmaceutical industry – not to mention the big news about one of Pfizer’s pipeline drugs – there is lots to talk about in the pharmaceutical industry these days. We sat down with senior analyst Jason Napodano, CFA, who covers both Big Pharma and Biotech for Zacks Equity Research. Clearly, the big news over the weekend was that Pfizer stopped production on its leading pipeline product, torcetrapib. You were even quoted in AP about it. What is your view? We think this is devastating news for Pfizer (PFE). We were already slightly negative on our outlook of the company, but we felt that torcetrapib was one bright spot making the stock worth holding onto. Basically, this drug extended the pipeline of the Lipitor franchise, which loses patent protection in 2010. Therefore, our top-line forecasts for 2010 and beyond are being significantly reduced. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - As I said in the AP interview, it’s noteworthy to remember that at the end of last month, Pfizer pulled out of its deal with Organon to develop a schizophrenia treatment called asenapine. We expected that that drug would add $500 million in sales by 2010. So that, in addition to the estimated $3 billion in total sales of torcetrapib projected for the same year, leads us to be very wary of Pfizer’s long-term growth ability. Of course, a company the size of Pfizer – the biggest of the Big Pharma group – is expected to account for its growth through cost-cutting acquisitions, or even buy out a slew of biotech companies. But such growth is very risky, expensive and highly speculative. Furthermore, Pfizer’s pipeline just doesn't have another drug which offers the sales potential of torcetrapib. I just don’t see it happening for Pfizer at this point, and I downgraded the shares to a Sell recommendation with a six-month target price of $20. Earlier this year we talked about Big Pharma/Small Biotech mergers, and one of the names you mentioned was CoTherix. Looks like that turned out pretty well? Yes, CoTherix (CTRX) announced last month that they have agreed to be acquired by Swiss rival Actelion for $420 million. CoTherix markets Ventavis for pulmonary arterial hypertension (PAH), as well as having a potential big drug in mid-stage trials called Fasudil. They also have a registry program ongoing to collect information about patients with PAH. Actelion, also a big player in PAH with market leading oral drug, Tracleer, was interested in getting their hands on this data registry, as well as co-promoting Ventavis with Tracleer. PAH is a large and underserved market, but awareness and education are key to driving future growth of these products. The deal ] makes excellent strategic sense for both companies. This was a classic example of “team up and conquer.” There was another deal involving PAH earlier this year, right? Yep, Gilead Sciences (GILD) announced a few months ago they would acquire Myogen for $2.5 billion. Gilead, one of the largest biotechs out there, got that way by becoming the world’s premier HIV/AIDS play. However, Gilead wanted to diversify and PAH offered a new opportunity for growth. Myogen is a big player in PAH already with Flolan, but could really capture big market share in the category once phase III product ambrisentan comes to market. It’s all about products and the pipeline, and Gilead plucked a winner, in our view. Click here to read the complete Analyst Interview. Jason Napodano, CFA is a senior analyst covering the pharmaceutical & biotechnology markets for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include CACI International (CAI), Dynamics Research (DRCO), Liberty Media Interactive (LINTA) and Unilever (UL). See their latest posts: click here. Liberty Interactive (LINTA) - Impressive Growth Story. For full Zacks research report, click here. Affordable Residential (ARC) - Unattractive on Many Fronts. For full Zacks research report, click here. The Week of Dec 4 – Dec 8 Seasonal Lull 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. OPTIONS CENTER Zacks has partnered with the leading options experts, Schaeffer's Investment Research, to provide you the best options commentary, research, and trading tools on the market today. Zacks/Schaeffer’s Options Trading service. After enjoying a week off for Thanksgiving, we’re back and ready to look at another filter and try to find a money making play. To do this, we’ll take a look at the Unusually High Put Volume filter and try to find a bullish idea. Before we go any further, we want to talk briefly about our Expectational Analysis® methodology here at Schaeffer's. We are contrarian-based investors, meaning that we seek skepticism toward an outperformer as a sign that money is still on the sidelines. Conversely, we want to see optimism toward an underperformer. We view too much optimism as a potential sign that nearly everyone who wants to invest in a particular stock has done so already. Now, just because a stock sees substantial optimism doesn't mean that we will blindly short a particular security; we need to see some negative price action or a major catalyst for a downside move in order to pull the trigger in most cases. Other indicators that we tend to utilize in measuring overall sentiment include put/call ratios, short interest, magazine cover stories, media comments, and analyst ratings. Looking at the list of 20 names from Thursday, one name stood out and that was energy leader Marathon Oil (MRO). According to the filter, 7,593 bearish puts traded on Wednesday on MRO – twice its daily put volume. Now let’s look at the chart. Technically, MRO looks great, as the shares have gained over 54% in 2006 and they are currently consolidating near recent highs. A very nice looking picture. So we have a market leader, yet bearish puts are still being traded on it. This is exactly what we want to see. At this point, we must look at the other areas of sentiment to determine if there is indeed enough skepticism to warrant a bullish play. One indicator that we like to use to measure sentiment is the Schaeffer's put/call open interest ratio (SOIR). This ratio shows how many puts there are compared to calls for the front three months of options. Currently, MRO’s SOIR checks in at 1.04. When compared with other readings over the past year, we find that this is higher than 98% of the readings over the past year, suggesting short-term option players remain extremely bearish. Short selling is one stock-trading strategy that basically involves selling a stock with the intention of buying it back later at a lower cost. In other words, you are betting that the shares will go down. We view a lot of shorts as bullish, as it increases the odds of a short covering rally on any good news. Looking at MRO, unfortunately this is the one major negative according to our view – there aren’t many shorts betting against the shares. In fact, it would take just over a day for all the shorts to cover – reducing the odds of a short covering rally on any good news. If there is one bit of silver lining – it’s the shorts increased their bearish bets by over 15% last month. With the shares up near highs, this could be a sign the shorts aren’t ready to throw in the towel just yet. Finally, according to Zacks, analysts are pretty bearish, as there are five “buys”, and eight “holds”. With the shares up near new highs, this leaves the door wide open for some upgrades down the road. Add it all up and MRO looks like a nice play according to our contrarian point of view. Write this one down and let’s see how it does, but everything is in place for continued gains down the road. We’ll be back next week to take a look at the other side of this filter but using calls. In the mean time, please continue to use all of the filters on these pages and try to find out which ones work best for you. Remember; don't be afraid to paper trade a few here and there, as this is a great way to learn. Finally, options are highly leveraged vehicles, and the odds favor that most of your trades are going to be losers. But, thanks to this high leverage, all it takes are a few winners here and there to be more than profitable. Keep on using the filters and good luck! To learn more about the Unusually High Option Volume filter, click here. Discover all the tools and commentary available from the Zacks.com Options Center. Leverage the timeliness of Zacks #1 Rank stocks with options trades that maximize profits and minimize risks. Learn more about our new Options Trading service. 5. FEATURED EXPERTS Here we cast the spotlight on a timely Featured Expert commentaries that recently appeared on Zacks.com. Richard Moroney profiles some of his favorite stocks, which boast strong operating momentum and attractive valuations. More... Kelley Wright discusses the conspicuous consumption taking place in the land of mergers and acquisitions. 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 Rank 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 and 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 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 05/22/2013
| Company Name | Symbol | %Change |
|---|---|---|
| ALLIANCE FIB | AFOP | 9.31% |
| SONIC FOUNDR | SOFO | 7.77% |
| VELTI PLC | VELT | 7.58% |
| TRI-TECH HOL | TRIT | 6.62% |
| AMR CORP | AAMRQ | 4.52% |
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