Tuesday - December 12, 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 - Infosys Technologies (INFY) More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Momentum - Zoll Medical (ZOLL) Zoll Medical (ZOLL) is up about 84% since it was a featured Zacks Momentum Stock of the Day on Jun 12, 2006. This excellent market performance is powered by a fifth consecutive positive earnings surprise when the company reported earnings for the Sep 06 quarter on Nov 19. ZOLL reported earnings of 55 cents, which was 139% higher than the same quarter last year and a 67% positive earnings surprise above analysts’ consensus estimates. The stock gapped higher into new 52-week high ground and is now trading at the highest levels since Nov, 2000. Read the full analysis on ZOLL now! Since we first highlighted Shoe Carnival, Inc. (SCVL) as a Value pick on Feb 15, the stock is up nearly 30%. The company's third-quarter results were the highest sales and net earnings for any quarter in its history. Moreover, sales and net earnings for the first nine months of the year were the highest SCVL has ever achieved for that period of time. Consensus estimates for this year and next have increased over the past 60 days. Read the full analysis on SCVL now! Find the best-performing stocks within the Zacks #1 Rank list each week. Last week’s top performers include Bandag, Inc. (BDG) with a 15.7% 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: 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. Avnet, Inc. (AVT), a Zacks #1 Rank (Strong Buy) company, satisfies the criteria of this Profit Track with a PEG ratio of 0.66 and a price/sales multiple of 0.25. The company reported fiscal first-quarter earnings of 56 cents per share, excluding charges, in late October. The result topped the consensus estimate by almost 8% and outperformed the year-ago total. The company noted that it delivered a solid start to fiscal year 2007 with double digit year-over-year growth on the top line and operating income growing more than 6 times faster than revenue. Read the full analysis on AVT now! JAKKS Pacific, Inc. (JAKK) offers current ratio of 2.74 and a debt/equity level of 0.17. In mid-October, the company announced third-quarter earnings of $1.26 per share, improving on the previous year’s $1.05 and surpassing the consensus estimate by approximately 2%. JAKK stated that with strong initial orders for the holidays, it achieved record third-quarter sales and has positive momentum heading into the fourth quarter. Read the full analysis on JAKK now! Plexus Corp. (PLXS) posted non-GAAP earnings of 54 cents per share for the fiscal fourth quarter. The result, which was released in November, beat the year-prior 24 cents and exceeded analyst’s expectations by nearly 15%. The company mentioned that the balance sheet was strengthened in 2006 by strong cash flows from operations. PLXS has a current ratio of 2.25 and a debt/equity level of 0.05. Read the full analysis on PLXS now! United States Steel Corp. (X) sports a PEG ratio of 0.82 and a price/sales multiple of 0.61. In late October, the company reported third-quarter earnings of $3.42 per share, eclipsing the consensus estimate by roughly 7% and outpacing last year’s result. United States Steel Corp. said earnings for each of its business segments improved from the second quarter, reflecting a very strong operating performance and favorable steel market conditions. Read the full analysis on X 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”. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Using Common Sense to Manage Your Portfolio Kevin Matras explains why monitoring stocks is as important as picking them. More... 3. ZACKS EQUITY RESEARCH With the holidays right around the corner, we thought it would be a good idea to check in on some industries that might be benefiting from this time of year. We therefore spoke with senior analyst Steven Ralston, CFA about what’s been going on in the food & beverage group. You cover the food and beverage industries. Are there stocks in these groups that do particularly well around the holiday season? Stocks in the food and beverage industries, and for that matter most stocks in the entire Consumer Staples sector, generally outperform during the holiday season. However, the driving factor is the seasonality of the economy. During November and December, economically sensitive companies can suffer as capital expenditures trail off until the new budget year. Some capital goods and technology companies usually pre-announce and disappoint near the end of the fourth quarter. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Stocks in the Consumer Staples sector are considered defensive, since the companies are less sensitive to the economy with their attributes of modest revenue growth and EPS growth, and therefore, Consumer stocks, but especially food and beverage stocks, have traditionally outperformed during the fourth quarter. Recently, Unilever was upgraded by another analyst or two, but you’ve had a Buy on it since it was trading at around $23. Where do you see this stock headed? Unilever (UL) should continue to benefit from the implementation of Path to Growth strategy and the expected cost savings from the overhead simplification project. In addition, the simplified management structure, in which the dual Chairman structure has been replaced by a single Chief Executive Officer, is improving execution and focusing the company on higher margin product lines. Underlying sales growth in the most recent quarter was above expectations at 4.8%, and the Board of Directors surprised the Street with a one-time special dividend and a large $1.8 billion share repurchase plan to be executed in 2007. The stock currently trades at a 16.5 P/E. Given the improving fundamentals, we expect the stock’s P/E to expand over time. Our six-month target price of $29.50 is based on an 18 P/E, but over time, the P/E could expand to its historical high of 24. Many industries are increasing their M&A activity these days. Is there much of that expected with this group? Currently, there is little, if any, M&A activity in the Consumer Staples sector. Though consolidation will continue to play a role in the business strategies of most consumer non-durable companies, the timing of specific acquisitions is problematical. The last wave of takeovers in the Consumer Staples sector occurred in early 2005 when Adolph Coors was acquired by Molson (TAP) and Robert Mondavi was acquired by Constellation Brands (STZ). The most significant merger announcement was made in January 2005 by Proctor & Gamble (PG), when an agreement was made to acquire Gillette. Large consumer companies generate strong cash flow, and managements constantly look for opportunities to acquire a valuable niche companies. Companies like Dean Foods (DF), Hain Celestial (HAIN), and Playtex Products (PYX) are building businesses that one day may be attractive to a larger company. Click here to read the complete Analyst Interview. Steven Ralston, CFA is a Zacks analyst covering a variety of companies in various industries of the Consumer Sector and Services industries. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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. Kimco Realty (KIM) - Raising Estimates Again. For full Zacks research report, click here. Kimberly-Clark (KMB) - Costs Hurting Results. For full Zacks research report, click here. The Week of Dec 11 – Dec 15 Forecasts Still Good, Despite Drop in Estimates 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. Last week we looked at the Unusually High Put Volume filter and determined that Marathon Oil (MRO) looked like a nice bullish play. Today we’ll take a look at the Unusually High Call Volume filter, the other side of this filter, and see if we can’t find a bearish play for the coming months. 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. Taking a look at the 20 companies from the list on Friday, telecom giant Corning (GLW) caught my eye as over 31,000 bullish calls traded on it Thursday – 2.4 times the average daily call volume. With most other telecom names making new multi-year highs, the chart of GLW looks pretty weak. When it comes to trading here at Schaeffer’s, we like to play bearish puts on the laggards that have an optimistic sentiment backdrop – and GLW is definitely that. Looking at the chart of GLW, the shares ran into a double barrel of resistance from their 50- and 80-day moving averages. This region also is near $22.50 – a site that has a huge buildup of bullish calls in December, January, and February. This buildup of calls could act as a solid level of resistance. I won’t get into the dynamics of why – but it has to do with the way the floor is hedged. The bottom line is a buildup of calls at a certain strike could serve as resistance. Let’s think about this some. We have a market laggard from a strong sector, yet the options crowd continues to trade bullish calls on it. So far this is looking like a nice play from our contrarian way of thinking. Before we go out and load up on puts on GLW, let’s look at some other areas of sentiment. 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, GLW’s SOIR checks in at 0.53. When compared with other readings during the past year, we find that the ratio is lower than 73% of the readings during the past 52 weeks, suggesting short-term option players remain confidently bullish. 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 lack of shorts as a sign of little skepticism – thus reducing the odds of a short-covering rally on any good news. Turning to GLW we see there aren’t many shorts betting against this laggard. In fact, it would take less than a day for all the shorts to cover their bearish bets – greatly reducing the odds of a short covering rally on good news. Add it all up and GLW sports a Schaeffer’s Gold Score of 3.0 out of 10.0 – suggesting the path of least resistance is indeed lower. With all of that, I think the odds do favor continued weakness and because of that I’d recommend playing an intermediate-term put on GLW. Write it down and let’s see how we do, but at this time it definitely looks like a nice play. We'll be back next week to take a look at the other side of this filter using calls. In the meantime, 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... Bill Martin highlights a company that he believes is taking the right steps to continue creating value for its shareholders. 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. | |||||||||
- Latest News
- Most Popular
- 3 Dreamy Small-Cap Stocks
- Correction or Summer Range Trade?
- Hitting Home Runs & Grand Slams, Not Loud Outs
- Hedge Your Portfolio with the Equity Bear ETF
- Machinery Industry Stock Outlook - May 2013
- Determining Correct Position Size with Options
- This Week's Growth & Income Stocks
- RTI: Do Stocks Tank When QE Ends?
- 3 Top-Ranked Consumer ETFs to Buy Now
- AWS 5/23: Is the Market Over-Reacting?
- PFP 5/23: Do No Harm
Recent Quotes
| No Recent Quote currently available |
My Portfolio
|
My Portfolio Tracker One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts. Set yours up today. |
Zacks #1 Stocks on the Move 05/23/2013
| Company Name | Symbol | %Change |
|---|---|---|
| ALLIANCE FIB | AFOP | 5.21% |
| CYNOSURE INC | CYNO | 4.42% |
| DAWSON GEOPH | DWSN | 4.33% |
| MARRIOTT VAC | VAC | 3.27% |
| BLOOMIN' | BLMN | 2.93% |
Quick Links
Resources
Client Support
Zacks Research is Reported On:
Zacks Investment Research
is an A+ Rated BBB
Accredited Business.
Copyright 2013 Zacks Investment Research
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.
Visit performance for information about the performance numbers displayed above.
NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.