Friday - February 9, 2007
![]() Want to view the archive of past issues? Click here. Manage Profit from the Pros subscription: 1. ZACKS RANK BUY STOCKS Zacks #1 Rank 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 – Mylan Laboratories, Inc. (MYL) Mylan Laboratories, Inc. (MYL) just reported a strong quarter and guided higher. The company has exceeded earnings estimates in five straight quarters, with year-over-year growth averaging over 50% over that time frame. Four analysts have raised their forecasts for this year. Over the past week, 2007 estimates have increased eight cents to $1.48 per share. Read the full analysis on MYL now! C.H. Robinson Worldwide, Inc. (CHRW) beat analysts’ earnings expectations for the past six quarters by an average margin of 7.3%. Consensus earnings estimates have inched up over the past seven days. On Nov 16, the Board of Directors declared a 38.5% boost in its regular quarterly cash dividend to 18 cents per share from 13 cents. CHRW has a current dividend yield of 1.4% and a five-year average dividend yield of 1.0%. Read the full analysis on CHRW now! On Feb 6, AeroCentury (ACY) delivered its second straight triple-digit positive earnings surprise when it reported fourth-quarter 2006 profits of 35 cents per share. The result was up 775% from the year earlier quarter and represented a 289% positive surprise above analysts’ consensus estimates. Read the full analysis on ACY now! Argonaut Group, Inc. (AGII), a Zacks #1 Rank stock, topped analysts’ earnings expectations for five straight quarters by an average margin of 16.3%. The company recently reported impressive results for the fourth quarter and full year of 2006. Analysts have been upping their earnings estimates for both this quarter and the full year. AGII has a price-to-book ratio of 1.4 and its PEG ratio currently resides at 0.71. Read the full analysis on AGII 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 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. Albemarle Corp. (ALB), Zacks #1 Rank (Strong Buy) company, recently announced a two-for-one stock split and increased its regular quarterly dividend for the thirteenth consecutive year. In late January, the company posted record fourth-quarter results, which included earnings per share that were nearly 26% ahead of the consensus estimate. ALB produced earnings per share growth of 20% over the past five years. Continue your research on ALB now! Guess? Inc. (GES) will release its financial results for the fourth quarter on February 14, 2007. 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. 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. The Zacks #1 Rank (Strong Buy) company boasts earnings per share growth of 84% over the past five years. Continue your research on GES now! Lockheed Martin Corp. (LMT) reported financial results for the fourth quarter in late January. Earnings per share eclipsed the consensus estimate by 13% and outperformed the year-prior result. Four out of the past five consecutive earnings per share quarterly results have been above analysts’ estimates. The company put together a five-year growth track record of 26%. Continue your research on LMT now! Universal Stainless & Alloy Products, Inc. (USAP), another Zacks #1 Rank (Strong Buy) company, experienced earnings growth of 49% over the past five years. USAP recently announced fourth-quarter earnings per share that surpassed the consensus estimate by 21% and outperformed the year-ago total. USAP said it achieved record results in the fourth quarter as it has each quarter this year due to the strength of its niche markets coupled with its targeted investments in capital equipment and personnel. Continue your research on USAP 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 increasing earnings. More... 3. ZACKS EQUITY RESEARCH Though high growth levels in China continue, they’ve grabbed fewer headlines in the U.S. lately, as investors here have been able to occupy themselves with other issues. To get back on track, we asked senior analyst Paul Cheung, CFA, who covers stocks in a variety of industries in China, how things are progressing there these days. We notice you still have Buy recommendations on many of the stocks you cover in China. Which industries in China do you expect to perform strongest? I expect that financial industries in China will perform strongest over the next few years. Chinese financial companies such as banks and insurance companies are less efficient than their American peers. This means that these companies have more potential to improve their profit margins. Competition from global peers can actually stimulate Chinese financial companies and improve their efficiency, which can be proven by looking at past experiences. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Moreover, many profitable businesses in the financial field are quite new in China. Chinese financial companies have great potential to develop their businesses as the Chinese economy continues to grow rapidly and people become richer. Do you expect cleaner environment initiatives in China to have an impact on growth and profitability at some point in the future? Cleaner environment initiatives in China will have a negative impact on growth and profitability of industries such as power plants and paper factories, which are not expected to become environment friendly in the future. However, it’s good for industries which can help clean the environment. In either case, the effects of such environment initiatives are not ultimately significant at this point because local governments in China will continue to try all means to stimulate the economy. What are your thoughts regarding growth in 2007? Is a slow-down inevitable? Although I expect growth will probably be less in 2007 than 2006 – due to the Chinese government trying to rein-in the fast-growing economy – I think the 2007 growth rate will still be above 9%. The reason is that the Chinese economy is now in a good stage; it is stimulated more by the private sector and foreign companies rather state-owned sectors. Which are your favorite Buy recommendations currently? SINA (SINA) is my favorite Buy recommendation right now. The reason is that the company is well positioned to leverage the great potential in the online advertising field in China. Online advertising in China is expected to grow 35% in the next five years. SINA is the leading internet portal in China, and its main users are middle-class Chinese people. Moreover, the Beijing Olympic Games will be held in 2008. So SINA can expect to increase its online advertising revenue greatly in the next several quarters. In what way would you advise investors who are looking to overweight Chinese stocks at this time? I would advise investors who are looking to overweight Chinese stocks at this time to focus on financial and real estate companies that have leading positions in China. Investors can benefit from not only the growth potential of them but also the appreciation of Chinese currency. Read the complete ANALYST INTERVIEW article now. Paul Cheung, CFA is a senior analyst covering various industries in China for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include Toyota Motor (TM), Chevron Corporation (CVX), Maguire Properties (MPG) and National Semiconductor (NSM). To see their latest posts, click here. Texas Capital (TCBI) - Healthy Outlook. For full Zacks research report, click here. Zoran Corp. (ZRAN) - Major Uncertainties. For full Zacks research report, click here. Disparity Between Energy Prices and Earnings Estimates 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. FEATURED EXPERTS Here we cast the spotlight on timely Featured Expert commentaries that recently appeared on Zacks.com.
John Reese plans to stay the course and continue selecting fundamentally sound stocks. Discover one of his new additions.. More...
Kelley Wright references an article regarding the relationship between dividends and earnings growth. Check out his commentary. More...
Steve McKee discusses the past in order to keep investors informed about the present. Benefit from his insight and discover three mutual funds. 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. | |||||||||


