Thursday - February 8, 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 – Emdeon Corporation (HLTH) Emdeon Corporation (HLTH) has exceeded earnings estimates in three out of the past four quarters. Earnings estimates for 2007 have been on the upswing over the past week, jumping five cents to 80 cents per share. The stock is reasonably priced at 17.8x 2007 estimates, below the projected long-term growth rate of 21.33%, giving the stock a PEG ratio of 0.83. Read the full analysis on HLTH now! Starwood Hotels & Resorts Worldwide, Inc. (HOT) beat the Street’s earnings estimate in 15 consecutive quarters. HOT increased revenues and grew profits for the past three years. Consensus estimates have risen over the past week due to the company’s bullish guidance for 2007. This Zacks #1 Rank stock is currently yielding 2.5% and has a five-year average dividend yield of 1.8%. Read the full analysis on HOT now! Momentum – II-VI Corporation (IIVI) On Jan 23, II-VI Corporation (IIVI) reported EPS of 30 cents for the December 2006 quarter, up 76.5% from last year and a 7% positive surprise above analysts’ consensus estimates. Sales grew 6.6% to $63.3 million, while income grew 21.5% to $9.11 million. IIVI has not disappointed for the last eight straight quarters. Read the full analysis on IIVI now! OMI Corporation (OMM), which was first featured as a Value pick on Jul 19, is still trading at a discounted valuation. Moreover, it continues to exceed analysts’ earnings expectations, having done so in eight out of the past nine quarters. On Nov 16, the Board of Directors raised the company’s regular quarterly cash dividend to 14 cents per share and announced a stock repurchase increase. OMM has a price-to-book ratio of 1.7 and its PEG ratio currently resides at 0.71. Read the full analysis on OMM 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. Tradeking1 Mark Miller, a self-proclaimed king of trading, is a momentum player on the look out for significant and unusual movement in the market on a minute to minute basis. The Zacks $100K Challenge player is also a mathematician, who is a fan of Warren Buffet and CNBC’s Jim Cramer. “I've always been focused on math and percentages. I steer more towards the opportunities that can be found in compounding profits on a daily basis rather than buy and hold strategies,” said Mark. “I like the Warren Buffet style of value investing and also watch Jim Cramer every day for ideas. I watch CNBC 14 hours a day. But none of that really matters. For me, it really comes down to math, which makes short-term profits compound daily into large gains. This market watcher currently garners a seventh place Simulator portfolio that is worth about $137,000, which translates into a 37% return since the beginning of the year. Mark doesn’t have favorites per se. He focuses on strategizing instead. The savvy trader stated, “If you look at my trade history you will see that an equal amount (1/4 of the portfolio) is spent on each stock. They all return a similar gain to create a steady, compounded profit.” Some of his current holdings include GIGABEAM CORP (GGBMW), NeuroMetrix Inc. (NURO), New York Times Co. (NYT), Atherogenics Inc. (AGIX) and Housevalues Inc. (SOLD). Click here to check out this participant’s complete portfolio. What’s his plan of attack? “I look for stocks making highly unusual movements. I run two computer systems with five monitors running real time market screens,” explained Mark. “I am looking for anything from large percentage moves in the last 1-10 minutes, to oversold stocks, which have shown instant strength, to suddenly crashing stocks that make for great short candidates. Generally I trade with just less than 1/4 of the account per trade to stay within the simulator parameters.” Mark summarized his strategy by telling us, “I trade fast, and use both right and left handed mice. I run livecharts on a one minute chart to gauge the reality of the movement. I drink lots of coffee.” How does he know when to sell? This Simulator Contender waits for all the market noise to simmer down. He explained that once volatility and volume subside, then it is time to sell. “I use as much discipline as I can possibly muster to not let me sell too soon,” added Mark. What does his crystal ball say? This stock picker is with the bears. He sees a flat market over the next four months and believes the Dow will end the year around the 11,500 level. Mark said, “If I had to predict the Dow for year end I would say 11,500 based on the large run we have had and the large influx of retail investors to the market again. I don't think that rate cuts when they get here will have the impact of running the market higher.” Any advice for those who are about place their first trade? This investor suggested starting small and experimenting with the Simulator before blindly placing large real-world trades. He also had a unique piece of “diversification” advice. Most investors know that diversification is an important trading component of any successful portfolio. However, this astute market player recommends diversifying among brokers. “Use three good brokers if you plan on putting large amounts of money into the market. Give them equal amounts and see for yourself what they do for you. Rely on all of their info and advice, but give the best broker more of your business,” remarked Mark. 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 As I drove to the train yesterday, the temperature outside was -2 degrees. The cold snap that is gripping the northern Midwest would seem to be a good sign for energy stocks. Certainly, the weather helped oil rebound to nearly $60 per barrel. But, the trend in earnings estimate revisions is not giving that warm, fuzzy feeling. Earnings estimates for oil-related stocks have been under pressure because of the pullback in oil prices that occurred in late December and early January. As prices fluctuate, brokerage analysts adjust their models to reflect where they think oil will trade in the future. The price of crude not only impacts the profitability of producers, but also affects how much they are willing to spend on capital projects. In addition, there is the issue of year-over-year comparisons and what type of growth rate oil companies could really achieve this year. In the backdrop of falling prices, some brokerage analysts are choosing to be conservative. Therefore, it is not surprising to see multiple oil-related stocks on the Zacks #5 Rank (“strong sell”) List, including BJ Services (BJS) and BP (BP). More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - It should be noted, however, that there has been a recent improvement in the revisions to full-year estimates for the stocks within the 12 oil-related industry groups. Over the past seven days, a cumulative 62 estimates have been revised upward, while just 53 have been revised downward. The devil in the details is that most of these revisions are a reaction to earnings reports and not rising crude prices. For example, eight analysts raised their forecasts on Tesoro (TSO) and six analysts raised their forecasts on Valero (VLO) after both companies delivered bullish fourth-quarter reports. (TSO) is a Zacks #2 Rank (“buy”) stock and VLO is a Zacks #3 Rank (“hold”) stock.) What is interesting is that for a large part of last year, brokerage analysts underestimated the ability of crude to stay at elevated prices and thus found themselves revising forecasts. Whether analysts are any more accurate this year remains to be seen, but to date, earnings estimates are not rising with the price of oil or oil-related stocks. Whether the recent cold snap will have a lasting impact on coal prices is also questionable. Coal prices recently rebounded after having been under pressure because of weakness in natural gas prices and warmer-than-usual temperatures in December and January; however, there are bearish factors that could limit the upward move. Winter is more than halfway over. The Democrat-controlled Congress is likely to be less friendly towards clean burning coal, a technology the Bush administration would like to promote. The report from the International Panel on Climate Change only added to the political headwinds. And Punxsutawney Phil predicted that spring is right around the corner. In addition to the macro factors impacting the industry, 2007 production guidance from Consol Energy (CNX) and Massey Energy (MEE) was not viewed favorably by brokerage analysts. CNX anticipates producing between 67.4 million and 71.4 million tons this year (64.7 million tons were committed as of Jan 11). In comparison, CNX produced 68.9 million tons last year. MEE has commitments for 40.8 million tons and believes it could produce an additional two million tons. Last year, MEE produced 39.1 million tons. In response to the guidance, 11 brokerage analysts cut their earnings forecasts on Consol Energy and nine cut their forecasts on Massey Energy. The current consensus estimate calls for CNX to earn $2.35 this year, down 39 cents from a few weeks ago. In regards to MEE, brokerage analysts project profits of $1.33, 21 cents less than they previously did. Both CNX and MEE are Zacks #5 Rank (“strong sell”) and are classified in the Coal group. 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 CSX Corporation (CSX), Zoran Corporation (ZRAN), Cypress Semiconductor (CY) and Ball Corporation (BLL). To see their latest posts, click here. J.C. Penney (JCP) - Long-Term Viability. For full Zacks research report, click here. Overstock.com (OSTK) - Goals Again Unmet. For full Zacks research report, click here. Play the Bounce in Semiconductors Another Double-Digit Quarter 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 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. Arrow Electronics, Inc. (ARW) offers a PEG ratio of 0.87 and a price/sales multiple of 0.33. In late October, the company announced third-quarter adjusted earnings of 71 cents per share, exceeding last year's 52 cents and beating the consensus estimate by a penny. Arrow Electronics has topped analyst estimates for the past four consecutive quarters. Continue your research on ARW now! Avnet, Inc. (AVT), a Zacks #1 Rank (Strong Buy) company, satisfies the criteria of this Profit Track with a PEG ratio of 0.78 and a price/sales multiple of 0.33. The company recently reported fiscal second-quarter earnings of 67 cents per share. The result topped the consensus estimate by 8% and outperformed the year-ago total. AVT stated that its strong quarterly performance was the result of its highly diversified revenue base and continuously improving expense productivity across both operating groups. Continue your research on AVT now! Shoe Pavilion Inc. (SHOE) recently announced that fourth-quarter net sales 38.7% on a year-over-over basis, while comparable store net sales advanced 8.6% over the same time period. The company said it believes that its strong fourth quarter performance was the result of matching product selection with consumer demand. SHOE has a PEG ratio of 0.74 and a price/sales multiple of 0.55. Continue your research on SHOE now! Western Digital Corp. (WDC) recently announced fiscal second-quarter earnings of 57 cents per share, surpassing last year's 47 cents and eclipsing analysts' expectations by 10%. The company managed to stay ahead of Wall Street estimates over the past five consecutive quarters. Western Digital’s debt/equity level is 0.02 and its current ratio stands at 1.73. Continue your research on WDC 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”. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - With Earnings Season in full swing, Kevin Matras goes over a screening strategy that targets consistently increasingly earnings: 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...
Guess? Inc. (GES) designs, markets, distributes, and licenses casual apparel and accessories for men, women, and children. The apparel reflects what the company refers to as the American lifestyle and European fashion sensibilities. The lines include full collections of denim and cotton clothing, including jeans, pants, overalls, skirts, dresses, shorts, blouses, shirts, jackets, and knitwear. The company also grants licenses to manufacture and distribute products that complement its apparel lines, including eyewear, watches, handbags, footwear, children s apparel, and other fashion accessories. Guess products are sold through three primary distribution channels: the company s own stores, a network of wholesale accounts, and the Internet. Guess branded products, some of which are produced under license, are sold internationally through a series of licensees and distributors. The company identifies its core customer as a style conscious consumer primarily between the ages of 15 and 30. These consumers are part of a highly desirable demographic group that is growing rapidly and has significant disposable income. The company also appeals to customers outside this group through specialty product lines that include Guess Collection, a more sophisticated fashion line targeted to women, and Guess Kids, targeted to boys and girls ages six to twelve. The investment case for Guess is based on the company’s strong brand name, continued store expansion, and profit margin expansion opportunities. Guess remains a popular brand for customers seeking denim fashions and accessories. This is helping the company enjoy the favorable fashion cycle for denim and leading to strong sales growth. The company is also using its brand equity to promote and grow its new upscale Marciano brand, which is expected to drive the company s sales growth in the future. Guess is opening new stores under the Marciano name and intends to eventually sell the Marciano brand exclusively in the Marciano stores, where Guess and Marciano stores are in the same market. In addition, Guess continues to expand its store base. Guess ended the third quarter of 2006 with 330 total stores, up 8% year-over-year. GES is scheduled to release its financial results for the fourth quarter on February 14, 2007. The company recently announced that its Board of Directors approved a change in the Company's fiscal year end from December 31 to the Saturday nearest January 31 of each year. In mid-January, Guess? Inc. increased its earnings per share forecast for the fourth quarter ended December 31, 2006 to a range of 91 cents to 93 cents. The company also raised its full-year 2006 guidance to a range of $2.60 to $2.62 per share. GES noted that its retail segment exceeded previous expectations due to higher revenues coupled with better gross margins resulting from more full-priced selling. Strong sales of the Company's accessories drove higher than expected licensing revenues, and the wholesale segment benefited from higher revenues and improved margins in the period. Analysts’ expectations are in line with the company’s projections. Current fourth-quarter earnings estimates of 92 cents per share moved up from one month-ago levels of 69 cents. Full-year 2006 estimates of $2.61 advanced from $2.38 over the same time period. GES has delivered higher than expected earnings per share over the past five consecutive quarters.
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 05/17/2013
| Company Name | Symbol | %Change |
|---|---|---|
| VIASAT INC | VSAT | 19.35% |
| OLD SECOND B | OSBC | 5.76% |
| GAMCO INVEST | GBL | 4.61% |
| CORNING | GLW | 4.47% |
| SYNCHRONOSS | SNCR | 4.23% |
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