Friday - December 15, 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 – American Commercial Lines, Inc. (ACLI) American Commercial Lines, Inc. (ACLI) has exceeded earnings estimates in four straight quarters, with three of them posting double-digit surprises. Over the past 60 days, this year's estimates have jumped 30 cents to $2.75 per share, while next year's have risen 25 cents to $3.69 per share. The stocks P/E ratio of 18x next year's estimates is well below the company's long-term growth rate of 31.8%. Read the full analysis on ACLI now! Carlisle Companies Incorporated (CSL) exceeded analysts’ earnings expectations in 14 out of the past 15 quarters by an average margin of 12.2%. After posting solid results for the third quarter, the company upped its full-year earnings per share guidance. The company has a current dividend yield of 1.4% and a five-year average dividend yield of 1.7%. Read the full analysis on CSL now! More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - If you have a teenaged daughter, chances are that you already know about dELiA*s (DLIA). And, given the money that they spend there, it won’t come as a surprise that sales and earnings are growing. On Dec 6, DLIA reported third-quarter earnings at 11 cents per share, a 57% positive earnings surprise and 83% above earnings in the prior-year period. Sales came in at $67.5 million, up nearly 12% from a year ago. Read the full analysis on DLIA now! Tidewater, Inc. (TDW), a Zacks #1 Rank stock, exceeded analysts’ earnings expectations for eight consecutive quarters by an average margin of 8.8%. Consensus earnings estimates have been trending higher for TDW. Earnings per share are projected to grow 36% over the next 3-5 years. The company has a price-to-book ratio of 1.8, compared to 4.9 for the market. Its PEG ratio currently sits at a miniscule 0.26. Read the full analysis on TDW 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: Low Price Stocks Many investors prefer stocks priced below $20 because the low prices allow them to accumulate more shares. Fortunately, lower prices do not necessarily mean lower quality. This strategy identifies stocks priced below $20 that are trading at discount valuations and have a Zacks Rank of #1 ("Strong Buy") or #2 ("Buy"). The stocks identified by this search strategy trade at price-to-sales (P/S) multiples of 1.0 or below. The strong Zacks Rank is indicative of positive revisions in earnings estimates. Combining these characteristics can result in high-dollar returns. In 2005, this strategy generated a stellar +51.9% return. Goodyear Tire & Rubber Co. (GT) is a Zacks #1 Rank (Strong Buy) company that has experienced earnings per share growth of $1.23 over the past 12 months and offers a price-to-sales ratio of 0.16. Goodyear Tire & Rubber released third-quarter results in early November. The company announced sales of $5.3 billion, a record for any quarter. GT's third-quarter earnings per share were nearly 83% ahead of the consensus estimate. Continue your research on GT now! Elizabeth Arden, Inc. (RDEN) reported a loss of two cents per share for the fiscal first quarter. The loss, however, was much narrower than analyst expectations of a loss of 23 cents. The first-quarter report, which was issued in early November, also included a fiscal 2007 earnings outlook of $1.10 to $1.20 per share. Analysts are in agreement as evidenced by current estimates of $1.16 per share, which is five cents above the forecasts of two months ago. RDEN earned $1.10 per share over the past 12 months and has a price-to-sales ratio of 0.55. Continue your research on RDEN now! Republic Airways Holdings Inc. (RJET) satisfies the criteria for this Profit Track with a price-to-sales ratio of 0.67 and earnings per share profitability of $1.73 over the past 12 months. In late October, the company posted third-quarter earnings of 50 cents per share, outperforming the previous year's 35 cents and exceeding the consensus estimate by almost 9%. The company has been ahead of analysts' expectations over the past five consecutive quarters. Continue your research on RJET now! Res-Care, Inc. (RSCR) announced third-quarter results in early November. Both earnings per share and revenues increased on a year-over-year basis. The company’s shares are currently trading around $19. RSCR may be a pick for a value as investor as its price-to-sales ratio stands at 0.42. Res-Care has seen earnings per share growth of $1.16 over the past 12 months. Continue your research on RSCR 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”. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Three Days Up: Price and Volume Kevin Matras goes over a price and volume screen for finding stocks on the move. More... 3. ZACKS EQUITY RESEARCH We recently spoke at length with senior analyst Paul Cohen, who covers small-cap stocks in the ethanol industry. With differing outlooks on the future of oil and gas prices, where does ethanol fit in at this time? Also, is now the best time to invest in ethanol stocks, or should we wait for a pullback? What are your current recommendations on the ethanol companies in your coverage? For the ethanol companies I cover at this time for Zacks Research – Pacific Ethanol (PEIX), VeraSun (VSE) and Aventine (AVR) – on all three of them, I have a long-term Buy. However, all ethanol stocks look to stay relatively weak as long as gasoline prices remain lower and supplies of oil are plentiful. If we were playing the stock market with these companies, we’d likely consider them Holds or even Sells right now. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - What would be some of the major factors that you see helping these ethanol stocks? The overall impetus for ethanol is strong and will continue to be strong. Ultimately, the ethanol business will convert to cellulose – the technology is not quite there at this time, but in three-to-four years it will be – and this will bring down the cost of manufacturing and producing ethanol. The other driver in the industry is the firing of ethanol plants with coal rather than natural gas. This will make the companies more profitable, and the financing of the industry will go to the low-cost producer. Not now, however; I’m thinking this will be over the next two or three years. I do expect these smaller ethanol companies will be the energy industry large-caps of the next generation. This fuel is the real deal. We anticipate these companies to grow to $1-2 billion in market cap, and estimate we may see $6-7 billion by 2015 or so. We’ve never seen the potential for growth in this industry like this before. Also, the big companies will no doubt buy out the little guys. Right now there are 14 publicly traded ethanol companies and 31 private companies. I expect we’ll see the privates getting bought up. The game is financing. And who is Wellington going to write the check for? The lowest-cost producer. As businesses, are they being run efficiently at this point? I think VeraSun is one of the best-run ethanol companies in the U.S. It is also the second-largest, I believe. They have really copied the Archer-Daniels Midland (ADM) model for running an ethanol business. Pacific just bought a 42% stake in a private ethanol company. Their plants are smaller than those anticipated at VeraSun and Aventine, but Pacific is commanding market share in California. Long-term, I see Pacific being attractive, and I look for them to expand their business outside of California. Overall, we would accumulate positions in ethanol stocks at these levels. We’re not sure where the bottom is, but the upside on a long-term basis is considerable. The road may not be smooth for growth in this industry in the near term, but ultimately we see the need for ethanol to be overwhelming. The industry also has important political backing on both sides of the aisle. Paul Cohen is a senior analyst covering stocks in the ethanol industry for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include Eli Lilly (LLY), Safeco Corp. (SAFC), Hallmark Financial (HALL) and Dynavax Technologies (DVAX). To see their latest posts, click here. Cell Therapeutics (CTIC) - Attractive Entry Point. For full Zacks research report, click here. Bausch & Lomb (BOL) - Recall Affecting Sales. For full Zacks research report, click here. Bullish on Oilfield Machinery and Equipment Stocks 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. FEATURED EXPERTS Here we cast the spotlight on timely Featured Expert commentaries that recently appeared on Zacks.com.
Richard Moroney provides investors with tools for assessing volatility. Benefit from his insight and discover a few stocks. More...
Jim Collins suggests taking advantage of declines in excess of 3%. Check out his commentary and a sampling of his holdings. More...
Don Dion provides a market outlook and profiles a mutual fund that’s all about computers. 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. | |||||||||


