Friday - March 9, 2007

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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 – Aircastle Limited (AYR)

Aircastle Limited (AYR) will release fourth quarter and year-end results on March 15. Analysts expect the company to earn 37 cents per share, up a penny from last week. The company exceeded estimates by over 14% in its September quarter, coming in with 32 cents per share. The stock is trading at 17x 2007 estimates, well below the projected long-term growth rate of 25%. Read the full analysis on AYR now!

 
Growth & Income – Valmont Industries, Inc. (VMI)

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!

 
Momentum – Belden CDT (BDC)

On Feb 8, Belden CDT (BDC) reported fourth-quarter earnings per share of 46 cents, up 48.4% from the same quarter last year. Revenues increased 14% to $378.8 million from $331.5 million in the year-ago period. Read the full analysis on BDC now!

 
Value - Allianz SE (AZ)

Consensus earnings estimates have been on the rise for Allianz SE (AZ) a Zacks #1 Rank stock. The Board of Directors recently announced a 90% increase in the company’s dividend. AZ has a current dividend yield of 0.96%. The company has a price-to-book ratio of 1.7, compared to 4.2 for the market. Read the full analysis on AZ now!

 
Zacks Rank Resources

• Zacks Rank Home Page: Go there now.
   
• Zacks Elite: Discover Ben Zacks' hand picked #1 Rank stocks on his Timely Buys list. Click here now.
   
• Zacks Options Trader: Combine the timeliness of Zacks #1 Rank stocks with the explosive profit potential of options. Learn more...
   
• Zacks Wealth Management: Own all the Zacks #1 Ranked stocks in a portfolio managed by Zacks. Learn more...

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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: Growth and Income

This screen looks for stocks that are paying dividend yields of greater than 8% along with other attractive fundamental attributes. Although this screen is based on a long-term and lower risk approach to investing, it has a history of outperforming the S&P 500.

Here are four stocks that make the grade for the Growth and Income Profit Track:

American Home Mortgage Investment Corp. (AHM) recently declared a quarterly dividend of $1.12 per share on the Company's common stock. The company’s current dividend yield stands at 16.60%. 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%. Continue your research on AHM now!

Crystal River Capital, Inc. (CRZ), which is yielding 10.56% right now, declared a quarterly dividend of 66 cents per share in mid-December. The company recently issued a press release that included the announcement of fourth-quarter 2006 investing activity. CRZ noted that the efforts it has made in building its commercial real estate origination capabilities give Crystal River Capital the flexibility it needs to invest in various segments of commercial real estate finance and moves the company closer to its targeted asset allocation. Continue your research on CRZ now!

Deerfield Triarc Capital Corp. (DFR) satisfies the criteria for this Profit Track with a current dividend yield of 9.97%. In mid-December, the company declared a dividend of 42 cents per share for the fourth quarter, up from the third-quarter dividend of 40 cents. DFR reported third-quarter earnings of 38 cents per share in mid-November, surpassing last year's 27 cents and exceeding the consensus estimate by almost 3%. Continue your research on DFR now!

Eagle Bulk Shipping Inc. (EGLE) offers a current dividend yield of 10.56%. The company recently posted fourth-quarter adjusted earnings of 33 cents per share, which matched the consensus estimate. Eagle Bulk Shipping also declared a quarterly dividend of 51 cents per share. EGLE stated that with this quarter's declared dividend of 51 cents per share, it has now declared aggregate dividends of $3.13 per share in just six quarters of operations. Continue your research on EGLE 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”.

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SCREEN OF THE WEEK

Beating the Market in Good Times and Bad

Kevin Matras goes over a Relative Price Strength strategy for finding winning stocks in all markets. More...
 

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As issues surrounding Medicare seem to get more confusing all the time, we were interested in getting a handle on what’s going on. We met with senior medical devices and supplies analyst Greg Aurand, CFA, who spoke with us about Medicare reimbursement.

The Medicare reimbursement issue seems a bit complicated. Can you help break it down for us?

I’ll try to keep it simple for the purposes of this discussion. For the companies I follow in the medical device and supply area, there are basic reimbursements. There’s the hospital – both in-patient and out-patient reimbursement – there’s the physician reimbursement for the physician’s time that is spent in order to perform a surgery or a procedure, and then of course there’s a device and procedure reimbursement, as well. So basically, you have three major reimbursement areas to look at, just in terms of one surgical procedure. There are other reimbursements involved, too, such as home care, drug reimbursements and things like that, but we’re just talking about the basic three here.

More. . .

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Zacks Equity Research continued...

How are the new proposals different than they were previously?

Generically speaking, it’s kind of an involved process. Medicare is trying to cut costs, but do it in an efficient way that doesn’t hurt patients or physicians. They are moving from a charge-based model, which would basically just take the charge presented by the physician or the hospital for the procedure or the costs involved, to a cost-based system for this year. It’s going to move even further in ’08 and beyond to a severity index, based on whether the procedure was a very simple one to do, whether there were complications, and whether there were other factors involved that required additional care.

So it’s kind of an involving system, and sort of complicated. But its basic premise is that Medicare is, first and foremost, trying to save money, as Medicare is a very costly part of government. At the same time, what it is trying to provide is more efficient use of those dollars.

What types of companies will these new proposals help?

Well, at least from how I see it regarding the companies I cover, the proposals don’t look to have too much of an impact. Although there is a concern that at some point device reimbursement might get cut because they may try to move those dollars to another bucket, whether it’s the hospital reimbursement or the physician reimbursement.

For the last few years, device reimbursement has generally been positive, as have in patient and out-patient hospital reimbursements. But in the case of devices, we have recently seen some cuts in the cardiovascular type of products, including stents, ICDs [implantable cardiac defibrillators] and pacemakers. The again, we’ve seen continued positive reimbursement in areas like orthopedics, including the spine, knee and hip implants.

In the case of physician reimbursement, we’re seeing cuts. There is a benign to slightly positive in-patient and out-patient reimbursement, to reflect the cost of the facility and the costs the hospitals have to recoup. So there’s a lot of ebb and flow to this, but looking forward, I’d consider the devices market to remain benign to slightly positive.

Read the complete ANALYST INTERVIEW article now.

Greg Aurand, CFA is a senior medical devices and supplies analyst for Zacks Equity Research.

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MORE FROM ZACKS EQUITY RESEARCH...
 

Analyst Blog

Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include Adecco S.A. (ADO), Fuel-Tech, Inc. (FTEK), Altera Corp. (ALTR) and POZEN, Inc. (POZN). To see their latest posts, click here.

 
BULL OF THE DAY

Saks, Inc. (SKS) - Turnaround Taking Hold. For full Zacks research report, click here.

 
BEAR OF THE DAY

BJ’s Wholesale (BJ) - Expect Further Weakness. For full Zacks research report, click here.

 
ZACKS INDUSTRY RANK

Time for a Fresh Look at Food Stocks?

Fresh Del Monte was the third food company to deliver a positive earnings surprise in recent weeks. More...

 
EARNINGS TRENDS

Earnings Season Over, Estimates Trend Higher

On balance, analysts have been raising their earnings estimates on specific sectors. More...

 
Rating Upgrades

Find out which stocks have been recently upgraded by Zacks Equity Research: click here.

 
Zacks Equity Research Buys

Read the reports on all of the stocks on the Zacks Equity Research Buy List: click here.

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Here we cast the spotlight on timely Featured Expert commentaries that recently appeared on Zacks.com.

 
Valuations at Attractive Levels

Jim Collins offers his comments on last week’s market slide and what it means for investors going forward. More...

 
Price is Right

Nadine Wong sees a strong year for one biotech. Learn about the company by reading Wong's latest stock update. More...

 
Believing What You Read

Mutual Fund expert Ron Rowland says Alan Greenspan’s recent speech was distorted by the media. More...

OTHER TOOLS FROM ZACKS

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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.

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Senior Market Analyst
Zacks.com

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