Tuesday - March 13, 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 - Kohl's (KSS) Mattel Inc. (MAT) was upgraded by Matrix Research from a Hold to a Buy on Mar 5. Since we last covered MAT on Feb 28, the stock has returned 4.0% and is up 21% for the year. In fact, on Mar 8 MAT broke through technical resistance and closed at a record high. Three consecutive positive earnings surprises are reinforcing the upward trend. Read the full analysis on MAT now! Hurco Companies Inc. (HURC), first presented as a Value pick on Dec 15, has returned over 48%. The company recently surprised to the upside by 42.4% when it reported first-quarter fiscal 2007 earnings per share of 84 cents. HURC earned 48 cents per share in the same quarter last year. Consensus earnings estimates continue to trend higher for HURC. Read the full analysis on HURC 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. Bell Microproducts Inc. (BELM) experienced earnings per share growth of 50% over the past five years. In early January, the company 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. Read the full analysis on BELM now! Brush Engineered Materials Inc. (BW), a Zacks #1 Rank (Strong Buy) company, reported fourth-quarter earnings of 44 cents per share, excluding an item, in mid-February. The result more than doubled last year’s 21 cents and surpassed the consensus estimate by 13%. Sales reached $207.8 million for the fourth quarter, an increase of 48% over the year-prior quarter. Sales for the full-year 2006 were a record $763.1 million, up 41% from the 2005 result. The company offers earnings per share growth of 47% over the past five years. Read the full analysis on BW now! Imperial Sugar Co. (IPSU), another Zacks #1 Rank (Strong Buy) name, reported fiscal first-quarter earnings of $1.37 per share, outpacing the consensus estimate by 54% and surpassing the year-prior total. The company noted that it was able to continue to show positive year-over-year earnings growth despite the softening of refined spot sugar prices. IPSU experienced earnings growth of 38% over the past five years. Read the full analysis on IPSU now! Universal Stainless & Alloy Products, Inc. (USAP), also a Zacks #1 Rank (Strong Buy) company, has put together a five-year growth track record of 49%. In mid-January, USAP posted fourth-quarter earnings per share that surpassed the consensus estimate by 21% and outperformed the year-ago total. The company 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. Read the full analysis 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”. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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... 3. ZACKS EQUITY RESEARCH Continuing our conversation with senior biotechnology analyst Grant Zeng, CFA, we wanted to find out both what his top biotech picks are going forward, and how he would advise investors position themselves in the industry. EDITOR’S NOTE: Part I of this interview can be found in the Analyst Interview archive from yesterday by scrolling down near the bottom of this page. Which companies in your coverage do you consider your top Buys at this time? Our top picks are Alkermes (ALKS), Myriad Genetics (MYGN), Sangamo Sciences (SGMO) and BioMarin (BMRN). More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ALKS holds two proprietary drug delivery technologies: the injectable extended-release technology and the AIR pulmonary drug delivery technology. The company has two approved products on the market: Risperdal Consta for schizophrenia and Vivitrol for alcoholism. Alkermes has a strong alliance with Johnson & Johnson (JNJ) and Cephalon (CEPH) for marketing Risperdal Consta and Vivitrol, respectively. The company reported better-than-expected fiscal third quarter (ending December 31, 2006) financial results. We believe Risperdal Consta sales will stabilize in the next two years, and Vivitrol sales will pick up momentum in the coming quarters. Alkermes is also collaborating with Eli Lilly (LLY) for inhalational insulin and Exenatide LAR for diabetes. Our target price for Alkermes is $20. We have been bullish on BioMarin Pharmaceuticals, Inc. since mid-2005 and are still bullish on it, especially following its recent pullback. BioMarin specializes in rare genetic diseases. The company caters to a niche market, and there is little competition for its products such as Aldurazyme for the treatment of MPS-I and Naglazyme for the treatment of MPS-VI. The company reported better-than-expected Q4 results. Sales of both Aldurazyme and Naglazyme continued to grow strongly in 4Q06. BioMarin also has a decent pipeline, with a Phenoptin filing for a new drug application [NDA] in the second quarter of 2007 for PKU, and expected approval by the end of the year or early 2008. Although 6R-BH4 failed a phase II hypertension trial, the company will continue to conduct other cardiovascular trials of 6R-BH4, such as PAD. BioMarin will become profitable in 2008. Our target price for BioMarin is $23. In Myriad Genetics’ case, revenue from its predictive medicine has shown solid growth in recent quarters, which helps fund its drug research and development. Myriad recently completed patient enrollment of a pivotal phase III trial for its Alzheimer’s drug Flurizan. One major characteristic of Flurizan is that clinical data indicate that it may be capable not only of slowing the decline of Alzheimer's disease, but of halting the disease in its tracks. Many patients on Flurizan got no worse over two full years, and in some cases, patients treated with Flurizan appear to have improved. If successful, Flurizan could be the first drug approved by the FDA for mild Alzheimer’s that has a preventative indication. We expect the company to file a NDA in late 2007, followed by an approval in 2008. Our target price is $40. We also have a BUY rating on Sangamo Bioscience. SGMO developed Zinc Finger DNA-binding protein technology (ZFP) and has a decent pipeline. The company has a few drug candidates in phase I and phase II clinical trials targeting unmet medical needs such as diabetes, cardiovascular diseases, HIV and brain cancer. SGMO’s unique proprietary technology distinguishes itself from the average struggling pharmaceutical companies developing “me too” drugs. Its technology has attracted some big pharmaceutical companies for collaboration, and makes it an ideal buyout target for some acquirers. Our target price is $11. Click here to read the complete Analyst Interview. Grant Zeng, CFA is a senior biotech analyst for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include Hallmark Financial (HALL), National Semiconductor (NSM), Avnet (AVT) and Pfizer (PFE). Get their latest posts: click here. Kimco Realty (KIM) - Steadily Increasing Rates. For full Zacks research report, click here. Pfizer, Inc. (PFE) - Struggling Growth Strategys. For full Zacks research report, click here. The Week of Mar 12 – Mar 16 Earnings Season Over, Estimates Trend Higher 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. OPTIONS CENTER Zacks has partnered with the leading options experts, Schaeffer's Investment Research, to provide you the best options commentary, research, and trading tools on the market today. Zacks/Schaeffer’s Options Trading service. Last week, we took a look at Zacks High Open Interest Put Position. This week we will look at a filter that hasn't garnered much attention recently, the Unusually High Volume - Calls filter. What is the Unusually High Volume - Calls filter? Well, let’s first define a put and a call. Puts are simply a bet that the underlying stock is going to move lower, while calls are a bet that the underlying stock is going to move higher. According to our Expectational Analysis® methodology, a heavy attention to calls by investors indicates an increase in optimism toward an equity, and can present the opportunity for a solid bearish addition to your portfolio. This week’s filter on Zacks lists stocks that have received an unusually high degree of call activity recently, providing us with a pool of securities that could fit the bill for a nice short position. You can sort the results either alphabetically by underlying issue, or from highest call activity to lowest call activity. Before looking at a particular stock, let’s address our Schaeffer’s methodology. We are contrarian-based investors, which mean we want to see skepticism toward an outperforming stock. On the other hand, we typically like to see optimism toward an underperformer. In our eyes, too much optimism is a sign that nearly everyone who wants to invest in a particular stock already has. Just because a stock sees substantial optimism doesn’t mean that we will blindly short that particular security; we need to see some negative price action or a major catalyst for a downside move in order to pull the trigger in most cases. Other indicators we use to measure overall sentiment include short interest, magazine cover stories, media comments, and analyst ratings. Scanning Friday’s list of stocks with unusually high call volume, I found a company that has received a bit of attention during the past week from the brokerage bunch. On Thursday, KLA-Tencor (KLAC) was upgraded to "overweight" from "equal weight" at Morgan Stanley. The brokerage firm even boosted its price target on KLAC to $65 per share from $60. With this news hitting the Street, it should come as no surprise that call volume spiked on the equity to more than six times the stock’s average daily volume. About 34,907 calls crossed the tape for KLAC, compared to average daily volume of about 5,278 contracts. What's more, quite a bit of this volume translated as fresh positions at several out of the money strikes for the security, spreading out over the March and April series. Combining translated volume for the two months, it seems that the 55 strike saw the lion's share of Thursday's activity. This focused attention to calls has driven KLAC's Schaeffer's put/call open interest ratio (SOIR) to a bullish extreme. In fact, the current reading of 0.64 ranks below 78% of all those taken during the past year. This optimism does not bode well for the shares from our contrarian point of view. On the short-selling front, investors definitely lack the type of pessimism that is indicative of a potential rally in the shares. Short interest would take a paltry 1.7 days to cover at the stock's average daily trading volume, providing for practically no short-covering support for the equity. Technically speaking, KLAC has extended itself well above support at its 10-week and 20-week moving averages. Furthermore, Thursday's upgrade-induced rally was stopped cold at resistance in the 54-55 region. The 54 level has proven to be quite a technical barrier for KLAC during the past couple of years, while the 55 region is home to peak call open interest. From a longer-term perspective, KLAC is trapped between support in the 40 region and resistance at the 55 level. Since February 2004, the shares have rarely strayed from this tight trading range. Make sure to continue utilizing all of the valuable filters on these pages for more money-making ideas. Moreover, don't be afraid to make a few paper trades in order to see what strategy works best for you. Please remember that, when it comes to options, the majority of your trades are going to be losers. Don't get discouraged, because that's the beauty of the leverage that options provide. It takes only a few winners out of every 10 trades to make you a very happy investor. Thanks for reading, best of luck in your trading! To learn more about the Unusually High Call Volume filter, click here. Discover all the tools and commentary available from the Zacks.com Options Center. Leverage the timeliness of Zacks #1 Rank stocks with options trades that maximize profits and minimize risks. Learn more about our new Options Trading service. 5. Best of the Zacks $100,000 Challenge Zacks is conducting a nationwide talent search to find the very best stock pickers. 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 on the Zacks Challenge Player Blogs. Best of the Zacks Challenge Player Blogs Here's what the leading players are saying lately: Dreyerd (Rank #6 with $169,787) MARCH 6TH LONG WATCHLIST UPDATE (RSH, PPD, AOI, INSP,GT) Read More or Comment on this post. Shoelessjoe (Rank #2 with $411,356) RESPONSE FROM MY CONGRESSMAN!!! (ENERGY) Read More or Comment on this post. Java J (Rank #1 with $972,224) LA JOLLA…IS THE UPWARD MOMENTUM FALTERING?? (LJPC) Read More or Comment on this post. Read all the Player Blog posts. 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 Rank FREE PORTFOLIO TRACKER Do you believe that these events affect stock prices?
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Zacks #1 Stocks on the Move 05/21/2013
| Company Name | Symbol | %Change |
|---|---|---|
| FEDERAL MOGU | FDML | 8.32% |
| SCIENTIFIC L | SCIL | 8.00% |
| SUMMER INFAN | SUMR | 6.93% |
| RADIANT LOGI | RLGT | 6.38% |
| NATUS MEDICA | BABY | 5.34% |
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