Friday - March 3, 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 – Rimage (RIMG) As a result of Rimage (RIMG) has significantly exceeded earnings estimates in each of the past four quarters by an average margin of about 31%. One out of the two analysts covering the stock raised his estimates for this year. Over the past week, this year's estimates have jumped nine cents to $1.44 per share. Read the full analysis on RIMG now! CIT Group, Inc. (CIT) exceeded analysts’ earnings expectations in 12 out of the past 15 quarters. After releasing solid results for the fourth quarter of 2006, the company raised its 2007 profit outlook. The Board of Directors boosted its quarterly dividend by 25% in mid January. CIT is currently yielding 1.8%, with a five-year average dividend yield of 1.6%. Read the full analysis on CIT now! On Jan 29, Mattel (MAT) reported fourth-quarter earnings of 75 cents, up 29.3% from the same quarter last year and a 13.6% positive surprise above analysts’ expectations. Sales were $2.11 billion, a 14.7% increase from $1.84 billion last year. With this report, MAT has exceeded analysts’ estimates in the last three quarters. Read the full analysis on MAT now! CF Industries Holdings, Inc. (CF) exceeded analysts’ expectations for the past three quarters, most recently by 8.7% in the fourth quarter of 2006. Consensus earnings estimates for this year and next have experienced sizable leaps over the past 30 days. This Zacks #1 Rank stock has a price-to-book ratio of 2.7, compared to 4.8 for the market. It is currently yielding 0.22%. Read the full analysis on CF 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: Return on Equity (ROE) This Profit Track strategy uses Return on Equity (ROE) to discover solid stocks. ROE is one of the quickest ways to gauge whether a company is creating assets or gobbling up investors' cash. Here are four stocks that make the grade for the Return on Equity (ROE) Profit Track: American Home Mortgage Investment Corp. (AHM) has a ROE of 20.09 and a price to sales ratio is 0.62. In late January, the company reported fourth-quarter earnings of $1.21 per share, soaring past the previous year's 27 cents and surpassing the consensus estimate by nearly 2%. In fact, AHM delivered earnings per share that topped Analyst expectations over the past five consecutive quarters. Continue your research on AHM now! Avnet, Inc. (AVT) satisfies the criteria for this Profit Track as evidenced by its ROE of 12.05 and price to sales ratio is 0.36. The company announced fiscal second-quarter earnings of 67 cents per share in late January. The result exceeded 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! General Cable Corp. (BGC) recently completed the acquisition of Jiangyin Huaming Specialty Cable Co. Ltd., a Chinese manufacturer of specialty automotive and industrial cable products. In early February, the company posted fourth-quarter earnings of 67 cents per share. The result surpassed analysts' expectations by 14% and soared past the previous year's total. Revenues climbed to $925.3 million from last year's $617.5 million. The company sports a ROE of 34.76 and a price to sales ratio is 0.70. Continue your research on BGC now! Keystone Automotive Industries Inc. (KEYS) offers a ROE of 11.28 and a price to sales ratio is 0.78. In late January, the company noted that it delivered record earnings and sales for its fiscal third quarter. Earnings per share totaled 57 cents, which surpassed the previous year’s 44 cents and jumped ahead of the consensus estimate by 21%. Continue your research on KEYS 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”. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Price Targets and Multiple Expansion Kevin Matras shows how to create your own price targets and how to estimate your stocks’ future earnings multiples. More... 3. ZACKS EQUITY RESEARCH We recently spoke with senior transportation analyst Ann Heffron, CFA about some of the headline-grabbing issues in the airline industry lately. In turn, she gave us her perspective on what she sees as the most important factors for the group looking ahead. With Q4 earnings nearly over, did the airline industry meet your expectations overall? Of the companies I cover, two came in about as expected, while the other two were worse than expected. In the cases of Frontier Airlines (FRNT) and United Airlines (UAUA), this was primarily due to snow storms that shut down operations in key markets for a few days. Although ExpressJet Holdings (XJT) and Pinnacle Airlines (PNCL) earnings were generally spot on, the real news for these companies is that major uncertainties have been resolved. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - In December, PNCL announced an amended agreement with Northwest Airlines (or NWA), effective January 1, 2007, which calls for : (1) a reduction in the target margin to 8.0% from 10.0%, with these rates to remain in effect (subject to annual inflation adjustments) until 2013 when the rates can be reset; (2) Northwest to provide fuel to PNCL at no charge to PNCL, and fuel to be removed as a revenue and expense item from PNCL’s income statement; and (3) the amount PNCL pays to NWA for subleasing aircraft will be significantly reduced. These changes are expected to reduce operating income by about $10 million per quarter. In addition, the agreement provides that PNCL will continue to be a long-term partner with Northwest through December 31, 2017, removes all restrictions regarding PNCL’s ability to provide airline services to other major airlines, places conditions upon further changes to PNCL’s fleet under varying circumstances, and provides a $377.5 million unsecured claim for PNCL against Northwest in Northwest’s bankruptcy proceedings. This agreement is subject to approval by the court overseeing Northwest’s bankruptcy. In its fourth quarter earnings release, XJT announced that it had determined plans for the 69 aircraft that were released by Continental Airlines (or CAL) in 2007. Fifteen of the aircraft will be operating charter flights in XJT’s Corporate Aviation division. XJT has flown 205 segments and 276 block hours since it began operations on December 31, 2006. Ten of the aircraft will most likely operate under a capacity purchase agreement with a new unidentified U.S. partner. Finally, XJT currently plans to use 44 aircraft to launch branded service in 24 cities in the West, Midwest and Southeast United States that will begin in April and May 2007. The bad news is that CAL and XJT have not been able to resolve their differences regarding a new operating agreement. Thus, rate negotiations with CAL for 2007 are under binding arbitration and retroactive to January 1, 2007. Read the complete ANALYST INTERVIEW article now. Ann Heffron, CFA is a senior analyst covering the transportation sector for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include ViroPharma (VPHM), Sprint Nextel (S), Joy Global (JOYG) and Merck (MRK). To see their latest posts, click here. Smith Micro (SMSI) - Products in Demand. For full Zacks research report, click here. Liberty Property Trust (LRY) - Scarce Growth. For full Zacks research report, click here. Red is Making Green for Food Companies First-Quarter Growth Expected to be Slower 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 Rhodes notes that the market’s recent decline could very well be the beginning of a long-awaiting 5% to 10% correction. More...
The market was receptive to the overall picture presented by Dr. Melvin Pasternak says the Dow's daily indicators are retreating rapidly from overbought levels after a prolonged period of bearish momentum divergence. More...
Richard Moroney says the Quadrix stock-rating system is an excellent tool for uncovering attractive picks. Discover some of the stocks. 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. | |||||||||


