Thursday - January 25, 2007
 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 - H&E Equipment Services (HEES) H&E Equipment Services (HEES) has met or exceeded earnings estimates in each of the past three quarters, with two of those periods registering surprises of 40% or more. Two analysts have raised their forecasts for this year, while one has done so for next year. Over the past week, the stocks average broker recommendation has jumped to 2.00 from 2.50. Additionally, earnings estimates have increased about 10% over the past three months for 2006. Read the full analysis on HEES now! Merrill Lynch & Co., Inc. (MER), which was last featured as a Growth and Income pick on Sep 22, has returned over 21%. The company topped analysts’ earnings expectations in 15 out of the past 16 quarters. Consensus estimates have been on the rise for this Zacks #1 Rank stock. The Board of Directors recently announced a 40% boost in the company’s quarterly dividend to 35 cents per share. Read the full analysis on MER now! More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Momentum - Universal Stainless & Alloy Products (USAP) A level of resistance spanning more than eight months was recently broken by Universal Stainless & Alloy Products (USAP) Shares surged on strong volume after the company topped earnings expectations for the 12th consecutive quarter. Read the full analysis on USAP now! AMCOL International Corporation (ACO) is a Zacks #1 Rank stock that’s beaten analysts’ earnings expectations in six out of the past eight quarters by an average margin of 14.0%. The company recently reported solid fourth-quarter and full-year 2006 results. ACO has returned value to shareholders in the form of dividend payments and share repurchases, including a recent boost in its quarterly dividend to 14 cents per share. ACO’s return on equity, a common measure of profitability, betters that of the industry average—18% compared to 17%. Read the full analysis on ACO now!
2. Zacks $100,000 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. LesterMajkowicz From fundamental and technical analysis to contrarian investing, Lester Majkowicz makes use of all the tools in his investment arsenal. Lester is not a gambler. Instead, this Zacks $100K Challenge player is disciplined and astute, employing a strategy that consists of thorough research and a strict adherence to set-price targets. While Lester may not gamble like a day trader, he is not afraid of taking chances in the micro-cap arena. “I look for stocks that are in fields of developing technology. These tend to be micro-cap stocks with little analyst coverage. However, they must have a product(s) in the marketplace or in production,” said Lester. ”Alternative energy is my focus now. I am a buy and hold believer but I set price targets and stick to them. I do not have a problem taking full profits once a stock has hit my price target. I also set stop loss targets and will sell at my loss target.” So while some Simulator contestants found their way into the top ten with momentum, short-term plays; this contender has recently reached seventh place with a less brazen and more methodical approach. He explained that his current overall return of 20% can be attributed in part to the many resources available on Zacks.com. Some of his current holdings include InterDigital Communications Corp. (IDCC) and Environmental Control Corp. (EVCC). Click here to check out this participant’s complete portfolio. Environmental Control Corp. is a favorite of Lester’s. He commented, ”Environmental Control Corp. is a bulletin board stock. Many people shy away from this arena but there are a lot of companies that are legitimate and are generating revenue. EVCC is in the business of producing small engines that comply with the new federal regulations on small engine emissions.” Lester added that the stock is rising because their newest engine has passed several tests and is almost ready for production. How does he do it? This stock picker certainly does his home work. In addition to studying the fundamentals and technicals, Lester will call the company directly to get answers to his questions. As a general rule, the savvy investor is mostly concerned with the fundamentals. “I look for revenue and products that have hit the market or will hit it soon. Also, capitalization is very important. Great ideas are only that, ideas, if the company does not have the resources to turn them into reality,” stated Lester. “However if the company is funding itself only by the sale or issuing of stock and thus causing significant dilution, I stay away no matter how good things appear.” When does he sell? This is where Lester starts relying a little more on the charts, but doesn’t forget to check the financial statements. He noted, “I will sell at my price target when it is hit. The target is determined by technical analysis if possible. At the initial purchase of the stock, I set a stop loss of 15%. This stop is written in stone. I will not go any lower. As the stock moves upward, I keep raising the stop. However, as the stock rises nearer to my target price, I begin to tighten my stop a little. This is all very basic stuff. If the fundamentals change I bail totally and quickly.” What does the future hold? Staying true to his contrarian colors, Lester believes a correction is forthcoming. He said, “Personally I believe the market is due for a correction, I do not know how large but it is coming. Most people are happily bullish now so my contrarian radar is on. The Dow will be at 12000 at the end of the year.” Any advices for the novices out there? Lester’s mantra is “don’t marry your stocks.” He is big on research and diversification. This Simulator top player’s concluding remarks were “do your research before you buy in, don't look for one or two stocks to be your home runs and accept your losses. Cut them short and move on to the next opportunity." We've launched a nationwide talent search for the best stock picker in the Zacks.com community. The winner gets a $100,000 dream job with Zacks! Sign up for free to join the competition, or just read what stocks the leading players are trading. Learn more. Trade Options? You can win valuable prizes in the Zacks Options Challenge. 3. ZACKS EQUITY RESEARCH One early trend in fourth-quarter earnings is the number of disappointments from companies within the Finance sector. Out of 26 S&P 500 companies that have issued disappointing results so far, 11 are within the financial sector. Within the broader Zacks Rank universe, financial companies account for 67 of the 135 earnings misses. There are two caveats to these numbers. First, finance companies, as a group, tend to report earlier than companies in other industries and therefore account for a disproportionate number of total reports. Second, the ratio of surprises to misses does not materially rise for the S&P 500 or the Zacks Rank universe when financial companies are excluded. (Excluding financial companies, the ratio of positive to negative surprises for the S&P 500 is 2.9:1. Including financial companies lowers the ratio to 2.62. As of yesterday, 24 financial companies within the S&P 500 have topped expectations, while 11 have missed and six have met.) More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The story here appears to be company specific, as opposed to negative trends affecting the sector as a whole. For instance, among the larger banks Citigroup (C) missed by a penny (EPS of $1.03 versus the consensus estimate of $1.04) whereas JP Morgan Chase (JPM) beat by five cents (EPS of 99 cents versus the consensus estimate of 94 cents). C has received criticism over its cost structure, whereas JPM offset weakness in its retail banking business with a material increase in investment- banking fees. Among mid-sized and smaller firms, weakness in the housing market and the inverted yield caused some to miss expectations, while others faired just fine in the current environment. For instance, First Horizon National (FHN) missed expectations by two cents with earnings of 60 cents per share. Income from mortgage banking was down considerably on a year-over-year basis. Conversely, growth in commercial loans helped KeyCorp (KEY) beat estimates by three cents with profits of 76 cents per share. Last week, two industrial products companies provided bullish guidance. Parker Hannifin (PH) expects fiscal 2007 earnings from continuing operations to be in a range of $6.35 to $6.75 per share, up from previous guidance of $6.05 to $6.45 per share. The raised guidance accompanied better than expected fiscal second-quarter profits of $1.55 per share. PH credited strength in its Industrial International and Aerospace segments, though profits from its North American Industrial segment also increased. Nearly all of the covering brokerage analysts raised their earnings forecasts for both fiscal 2007 and fiscal 2008. The new consensus estimates are $6.61 per share and $6.98 per share, respectively. SPX Corporation’s (SPW) initial 2007 guidance calls for profits from continuing operations to reach a range of $3.80 to $3.95 per share. The guidance was well above analysts’ forecasts for profits of $3.60 per share. (The consensus estimate has since been revised to $3.91 per share.) SPX believes it can achieve organic revenue growth of 6% to 8% thanks to what it describes as “strong” global demand, especially for power and energy products. The company will provide its fourth-quarter numbers on Feb 28. PH is a Zacks #2 Rank (“buy”) and is classified in Machinery- General Industrial. This group contains four Zacks #1 Rank (“strong buy”) stocks: DXP Enterprises (DXPE), Gorman Rupp (GRC), Nordson (NDSN) and Robbins & Myers (RBN). SPX is the sole Zacks #1 Rank stock in Auto/Truck-Replacement Parts. To read the complete Industry Rank Analysis, 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 Johnson & Johnson (JNJ), D.R. Horton (DHI), Starwood Hotels & Resorts (HOT) and Avici Systems (AVCI). To see their latest posts, click here. Hyperion Solutions (HYSL) - Strong Growth. For full Zacks research report, click here. Avici Systems (AVCI) - Revenue Concerns. For full Zacks research report, click here. Not as Positive as in the Past Company Management Key to EuroZone 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 Track: Upgrades and Revisions This strategy focuses primarily on Positive EPS Estimate Revisions and Brokerage Rating Upgrades. Over the last 20 years Zacks Investment Research has proven that earnings estimate revisions are the most powerful force driving stock prices. Studies have also shown that stocks receiving upward EPS revisions tend to receive additional upward revisions in the future. Then consider that stocks receiving these upward revisions generally have brokers upgrading their Ratings, which is also a proven mover of stock prices. There are other parameters to this strategy, but the Rating Upgrades and positive EPS Revisions are the two powerful active ingredients. Bell Microproducts Inc. (BELM) recently announced a preliminary fourth-quarter revenue range of $1.0 billion to $1.015 billion, an increase of approximately 20% over the $842 million reported in the previous year’s fourth quarter. The preliminary range exceeded management's previous fourth-quarter guidance of $920 million to $970 million. During the past five years, BELM's earnings per share grew by 50%. Continue your research on BELM now! Imperial Sugar Co. (IPSU), a Zacks #1 Rank (Strong Buy) company, will release fiscal first-quarter results on January 30, 2007. The company’s fourth-quarter earnings per share totaled $1.34, reversing the previous year's loss of 26 cents and topping the consensus estimate by approximately 52%. IPSU boasts earnings per share growth of 23% over the past five years. Continue your research on IPSU now! Joy Global, Inc. (JOYG) is also a Zacks #1 Rank (Strong Buy) name. The company put together an impressive five-year growth track record of 300%, which is currently the highest five-year growth rate listed under this Profit Track. In mid-December, the company posted fiscal fourth-quarter earnings per share that surpassed the consensus estimate by 20% and outperformed the year-ago total. Continue your research on JOYG now! Layne Christensen Co. (LAYN), another Zacks #1 Rank (Strong Buy) company, produced earnings per share growth of 95% over the past five years. The company announced financial results for the fiscal third quarter in early December. Earnings per share totaled 50 cents, which topped the previous year's total of 31 cents per share and eclipsed the consensus estimate by almost 43%. Continue your research on LAYN 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: Click here. 5. ZacksElite.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...
GlaxoSmithKline, Plc (GSK) formed in 2000 as a result of the merger between Glaxo Wellcome, Plc and SmithKline Beecham, Plc. The company offers pharmaceutical products such as antidepressants Paxil and Wellbutrin, asthma drug Advair, anti- infective Augmentin, cancer drug Zofran and diabetes drug Avandia. GSK also provides over-the-counter (OTC) medicines like Tums antacid and other health-related consumer products. These products are offered worldwide through its two major divisions: Pharmaceuticals and Consumer Healthcare, in association with its subsidiaries, licensees and distributors. GlaxoSmithKline is the second largest pharmaceutical company in the world, with a massive product suite in almost every single disease class. Several of these products are performing very well. Avandia (thiazolidinedione/PPAR-antagonist) is an oral anti-diabetic agent that acts primarily by increasing insulin sensitivity. Avandia is benefiting from a new combination therapy with a metformin drug called Avandamet. Zacks Equity Research Analyst Jason Napodano, CFA, believes that GSK's pipeline is the largest in the industry with over 150 candidates. As these new drugs come to the market, the threat from generic drug makers should be marginalized. Other pharmaceuticals do not have this luxury. The company possesses one of the industry’s deepest and most significant clinical research efforts. It has a number of potential billion dollar products for cardiovascular disease, oncology, pain management, vaccines, central nervous system disorders and gastrointestinal disease. GSK is one of the stronger fundamental players in the group. The company offers a four-year CAGR of 10%, superior to the peer-group average by 2-3%. Other European-based pharmaceuticals such as Novartis, Sanofi-Aventis, and AstraZeneca offers comparably better growth than their U.S. brethren. The company’s late-stage pipeline is unrivaled in the sector. Glaxo’s has over a dozen candidates in phase III trials. This dwarfs that of many other large-cap pharmaceutical names. As these candidates begin to come to market, Glaxo will see an up- tick in long-term growth. Earnings estimates have been trending higher over the past three months. 2006 estimates stand at $3.61 per share, up 27 cents during that time period. December 2006 earnings will be released on February 8. Analysts expect 85 cents per share, up two pennies over the past 90 days.
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 05/20/2013
| Company Name | Symbol | %Change |
|---|---|---|
| ORBOTECH LTD | ORBK | 10.86% |
| SONIC FOUNDR | SOFO | 9.45% |
| VIPSHOP HOLD | VIPS | 9.20% |
| RENEWABLE EN | REGI | 8.98% |
| EAGLE BULK S | EGLE | 7.84% |
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