Friday - April 20, 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 – Lazard, Ltd. (LAZ) Lazard, Ltd. (LAZ) has exceeded earnings estimates in five out of the past six quarters. Earnings estimates for this year have jumped 17 cents to $2.80 per share over the past 60 days. Next year's numbers have risen an impressive 58 cents to $3.18 per share. With the Mergers & Acquisition picture still looking bright, LAZ's earnings should continue to grow nicely. Read the full analysis on LAZ now! Avon Products, Inc. (AVP), currently in the midst of a turnaround plan, continues to buy back shares and pay dividends. In fact, on Feb 1, the Board of Directors declared a 5.7% increase in its regular quarterly dividend to 18.5 cents per common share. AVP has a current dividend yield of 1.9% and a five-year average dividend yield of 1.7%. Read the full analysis on AVP now! Quanta Services Inc. (PWR) has been in a consistent uptrend since breaking resistance in January of this year. The stock has returned over 34% for 2007, clearly benefiting from rising earnings estimates and the company’s consistent reporting history. Read the full analysis on PWR now! Credit Suisse Group (CS) reported impressive fourth-quarter and full-year 2006 results in mid-February. Management has returned value to shareholders through both dividend payments and share buybacks. The company is currently yielding 1.4%. CS has a price-to-book ratio of 2.6, compared to 4.4 for the market and 3.1 for the industry. Its PEG ratio currently resides at 0.65. Read the full analysis on CS 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: PEG Ratio This strategy uses the PEG Ratio to find attractively priced stocks poised for price appreciation. The PEG Ratio is simply the P/E (Price divided by Earnings) of a stock divided by its 5-year projected growth rate. Too often investors think of value investing being the antithesis of growth investing. The beauty of using PEG is that you can find value stocks even amongst hot growth stocks. Let's take a closer look. A company with a P/E Ratio of 20 and a Growth Rate of 10% will have a PEG Ratio of 2.0 (20 / 10 = 2.0). While a company with a P/E Ratio of 40 and a Growth Rate of 50% will have a PEG Ratio of only 0.8 ( 40 / 50 = 0.8) The stock with the P/E of 40 is actually the better bargain since its PEG Ratio is lower (0.8) implying it's undervalued with more upside potential. In general, a PEG value of less than 1 is considered undervalued while greater than 1 is thought to be fully valued to overvalued. The lower the PEG, the better the value, because the investor would be paying less for each unit of earnings growth. Here are four stocks that make the grade for the Earnings and Margins Profit Track: American Commercial Lines, Inc. (ACLI) offers a PEG ratio of 0.44. The company will release financial result for the first quarter on April 24, 2007. In early February, ACLI posted fourth-quarter earnings per share that increased on a year-over-year basis. Although the company missed Wall Street's fourth-quarter earnings estimate by 14%, American Commercial Lines ' earnings were ahead of analyst expectations for the previous four consecutive quarters . Continue your research on ACLI now! Aspreva Pharmaceuticals Corporation (ASPV), a Zacks #1 Rank (Strong Buy) company, is set to report first-quarter results on May 2, 2007. The company recently reported preliminary and unaudited net revenues of approximately $59 million for the first quarter. In early February, ASPPV announced fourth-quarter results. Total revenue reached $52.5 million, versus the year- prior $45 million. Fourth-quarter earnings per share were 73 cents, which topped last year’s 68 cents and exceeded the consensus estimate by 14%. ASPV sports a PEG ratio of 0.30 . Continue your research on ASPV now! Mattson Technology, Inc. (MTSN) will announce results for the first quarter on April 25, 2007. The company released its fourth-quarter report in late January. MTSN achieved record revenue of $83.6 million, compared to the previous year’s $50.4 million. Mattson Technology mentioned that in 2006, it outgrew the industry, delivering record revenue, bookings and cash for the year. The company satisfies the criteria of this Profit Track with a PEG ratio of 0.51. Continue your research on MTSN now! Tesoro Corp. (TSO) will announce financial results for the first quarter on May 3, 2007. In late January, the company posted record fourth-quarter earnings of $2.28 per share. The result beat the consensus estimate by 32% and outperformed the year-prior result. The company stated that its knowledge and experience in optimizing its system continues to develop and its decisions around crude oil purchasing and clean product management are significantly improving earnings. TSO’s PEG ratio currently stands at 0.44. Continue your research on TSO 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”. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Great Stocks Often Have Great Peers Kevin Matras explains how to find winning stocks in the winningest sectors. More... 3. ZACKS EQUITY RESEARCH New Dow highs and a recently begun first quarter earnings season are among the topics we are discussing with Zacks Senior Market Analyst Charles Rotblut, CFA. We hit a record high for the Dow the past couple days. What’s behind this? There’s just an underlying bullish sentiment going on. In late February, when we had the markets pull back because of the problems in China, our wealth management group actually saw more money being invested. We did not see fear set into the markets. More importantly, a lot of the downward volatility that a lot of investors feared would come back to the markets or thought was returning really didn’t return . More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - If we look at the VIX, the CBOE volatility index, there’s been a definite downward trend over the past four or five weeks. So we had a sudden spike that appeared to be a return to volatility, but at the end of the day, complacency is still the rule. We just have an underlying bullish sentiment to the markets. Are Q1 earnings having any affect at this point? Somewhat. The earnings have been better than expected in terms of surprises, but it’s still a pretty small group as far as what we’re seeing. As of Wednesday evening, we only had 80 companies with the S&P 500 reporting. So it’s still a small universe. We are seeing positive surprises outnumbering negative surprises. Growth has not been spectacular, however; we haven’t hit the double-digit growth rates I was expecting we’d see. But then again, the mix of companies is not totally represented in the indexes, so it’s hard to say earnings are not going to be double-digit once all companies have reported. Surprisingly, earnings out of the tech group have not been spectacular. In the semiconductor sector, we’re actually looking at negative growth. But we’re looking at just seven companies – and that’s if we add Motorola MOT into that group. So again, we’re seeing some negative numbers that might be pulling down the overall growth rate at this point. I think it’s too early to raise a warning flag, but if people are wondering what’s not doing so well, certainly semiconductors and tech in general can be considered. Although we just had some really great numbers from Google GOOG that were released after the bell, at least the revenue numbers look very strong. The banking sector has been flat – really no change. And that’s due to the problems with the housing sector – mortgage delinquencies, foreclosures – so to see earnings flat isn’t really a surprise. There are problems on the consumer side with the banking sector. Read the complete ANALYST INTERVIEW article now. Charles Rotblut, CFA is a senior market analyst for Zacks.com. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include eBay (EBAY), Stryker (SYK), Gilead Sciences (GILD) and Tweeter Home Entertainment (TWTR). To see their latest posts, click here. Schering-Plough (SGP) - Turnaround Complete. For full Zacks research report, click here. Avici Systems (AVCI) - Major Restructuring. For full Zacks research report, click here. Money in Metal Expectations Set Low for First Quarter Earnings 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. INVESTMENT IDEAS The editors at Zacks.com constantly analyze the universe of stocks to find the best investment ideas. Today, learn how you can profit from the video game industry: The computer and video game industry is a multi-billion dollar industry. Sales for U.S. computer and video game software grew 6% in 2006 to $7.4 billion—almost tripling industry software sales since 1996, according to the Entertainment Software Association (ESA). Other notable statistics include:
So, how can one profit from this ever-growing industry? Below are some of the top players in the video game industry: GameStop Corp. (GME) operates as a retailer of video game products and personal computer entertainment software. The company is also the largest reseller of used video games. GME currently operates 4,778 retail stores across North America and Europe. The great thing about this company is that no matter which game console or software titles eventually win out, GME will succeed by selling the most popular consoles and titles in its stores. We believe GME will continue to benefit from the current video game cycle, which is still in the early stages, and is being driven by next-generation video game consoles. These include Xbox 360, PlayStation 3 and Nintendo Wii. Furthermore, GME also stands to benefit a great deal from its merger with Electronics Boutique. This resulting size of the combined company is expected to provide GME with many competitive advantages and cost savings that should help drive solid sales growth and profit margin expansion for years to come. The company exceeded analysts’ earnings expectations in six out of the past eight quarters. Consensus estimates for both this year and next are up over the past 30 days. GME has a return on equity of 13%, compared to 9% for the industry. Electronic Arts, Inc. (ERTS) engages in the development, marketing, publishing and distribution of interactive software games worldwide. Its software games are playable by consumers on devices such as in-home video game players, personal computers, mobile platforms, including handheld video game players and cellular handsets, and over the Internet and other online networks. ERTS produces one of the most popular video games around—Madden NFL. The PlayStation 2 version sold 1.8 million copies, helping to make the game the top seller of 2006. On Feb 1, ERTS raised both its revenue and profit guidance for fiscal 2007. The company now expects revenues to be between $3.025 billion and $3.075 billion, versus its previous outlook of between $2.950 billion and $3.125 billion. Earnings per share are now forecasted to be between 15 cents and 20 cents per share, up from its previous expectation of breakeven to 15 cents. On Mar 1, ERTS announced that the best in videogame music from its best-selling games will be available for purchase from the iTunes Store via ea.com. Also, in late-March, the company announced the creation of a full-service music label, called The Artwerk label, in a joint venture with Nettwerk One Music Ltd. ERTS beat the Street’s earnings estimate in each of the past four quarters by an average margin of 95.2%. Read the full Investment Ideas article by clicking here. 5. FEATURED EXPERTS Here we cast the spotlight on timely Featured Expert commentaries that recently appeared on Zacks.com.
Nadine Wong anticipates a positive FDA decision for Dendreon’s (DNDN) Provenge for the treatment of prostate cancer. Read this biotech expert’s commentary. More...
Wall Street Digest proprietor Donald Rowe tells why investors should remain fully invested. More...
MONEYLETTER’s Walter Frank gives his latest impressions on overseas funds, as well as good-to-know news about one major mutual fund. 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. | |||||||||
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Zacks #1 Stocks on the Move 05/20/2013
| Company Name | Symbol | %Change |
|---|---|---|
| ORBOTECH LTD | ORBK | 10.86% |
| SONIC FOUNDR | SOFO | 9.45% |
| VIPSHOP HOLD | VIPS | 9.20% |
| RENEWABLE EN | REGI | 8.98% |
| EAGLE BULK S | EGLE | 7.84% |
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