Tuesday - May 29, 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 – Deckers Outdoor Corporation (DECK) Listen to the audio podcast on CBI through Zacks' NEW Audio Feature. Chicago Bridge & Iron Company N.V. (CBI) reported first-quarter earnings that exceeded analysts’ expectations. While the stock has risen 39% year-to-date and 12% since its first feature as a momentum play, technical indicators may indicate that further price acceleration is likely. Parker Drilling Company (PKD), a Zacks #1 Rank stock, exceeded analysts’ earnings expectations in four straight quarters by an average margin of 26.5%. Consensus estimates for both this year and next are up over the past 30 days. PKD recently set a new world record for extended reach drilling. The company has a price-to-book ratio of 2.9, compared to 4.5 for the market. Read the full analysis on PKD 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: Discounted Fundamental Strength) This Profit Track identifies stocks with strong underlying fundamentals and low valuations. These are companies with solid balance sheets and a history of profitability that are reasonably priced. Although conservative in approach, this strategy has generated double-digit returns for five consecutive years. Here are four stocks that make the grade for the Discounted Fundamental Strength Profit Track: Benchmark Electronics, Inc. (BHE) reported first-quarter results in late April, stating that it saw strong booking performance in the first quarter derived from both existing and new customers. While earnings per share came in a penny below analysts’ expectations, this was the first miss during the past five consecutive quarters. BHE has a very low debt to equity level of 0.01 and its current ratio stands at 2.58. Read the full analysis on BHE now! United America Indemnity, Ltd (INDM) reported first-quarter earnings of 60 cents per share in late April. The result topped the consensus estimate by a penny and surpassed the year-prior total. INDM delivered quarterly earnings per share that were ahead of Wall Street forecasts four times out of the past five straight quarters. The company satisfies the criteria of this Profit Track with a PEG ratio of 0.87 and a price to sales multiple of 0.98. Read the full analysis on INDM now! Western Digital Corp. (WDC) released fiscal third-quarter earnings of 53 cents per share, eclipsing the year-ago total of 45 cents per share and outpacing the consensus estimate by 13%. Revenue of $1.4 billion moved up from last year’s third-quarter revenue of $1.1 billion. The company's debt to equity level is a low 0.01 and its current ratio stands at 1.82. Read the full analysis on WDC now! ExpressJet Holdings, Inc. (XJT) has a current ratio of 2.58 and a price to sales multiple of 0.20. The company recently posted first-quarter earnings of 18 cents per share, jumping ahead of the consensus estimate by 20%. XJT offers a PEG ratio of 2.58 and a debt to equity level of 0.49. Read the full analysis on XJT 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”. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Screening for Stocks to Pick the Right Options Kevin Matras explains why a good stock screener can be your best tool for picking options. More... 3. ZACKS EQUITY RESEARCH With first quarter earnings season just about complete, we thought we’d check in with senior technology analyst Ken Nagy, CFA to see how results matched expectations for companies in the market in his coverage, and what he is looking for going forward. Did first quarter results in the semiconductor industry come in a little short of expectations? They were a little bit short. I think what happened is in 2006, the memory-makers really raced to add capacity. Applied materials was the main benefactor, and they watched their revenues grow by about 37% from the year earlier. ASM Lithography (Nasdaq: ASML) and Tokyo Electron were the other ones who enjoyed that race. Now in 2007, I think we’re paying the price a little bit here. How so? More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - We expect the semiconductor capital equipment spending to decline by about 3% this year. And if you look at a company like Cymer (Nasdaq: CYMI), I think they’ve acted as a little microcosm for the industry. The company was hurt by memory-makers putting off decisions based on DRAM and Flash technology. Both require different tools to build. When do you expect the semiconductor market might pick up? I foresee the second half of 2007 to be a period of strength. I think the market will have worked through these inventory gluts plaguing the industry now. And the third quarter generally brings the holiday season. As we talked about before, the semiconductor market has transitioned from computers and IT departments to electronic media like cell phones, iPods and games. So it’s become a little more seasonal. And in the third quarter generally you see a build. In which industries, then, do you see the biggest need for integrated chips, going forward? One area we’re excited about is power conversion ICs. And what they do is they regulate power throughout all kinds of products – not just computers, but washing machines and refrigerators and whatnot. Everyone in the industry sort of follows the California Energy Commission (the CEC), and they’ve just imposed new standards on power supplies. Washington state and also Arizona has since adopted the California standards. China has also recently announced a new voluntary program similar to what Energy Star does. And that’s obviously a very big market, too. So what are your top names among companies in your coverage? Today, I’d just like to talk about two companies that are gaining market share right now. ASM Lithography, which I spoke about earlier – they’re the largest OEM of advanced photolithography systems. Their March quarter revenue and EPS were in-line with consensus estimates. And going forward, we expect the revenue to climb as they continue to win market share. They have the leading generation immersion lithography tools, and that should lead to long-term growth. Another on is Varian Semiconductor (Nasdaq: VSEA). Now what they do is, they are actually on the front line – one of the companies that do ion implementation. So they actually blast things called dopants onto the chips. And as technology nodes get smaller, other competitors’ batch technology tends to break down, and it destroys some chips. Varian, on the other hand, they have what’s called a double-magnet ribbon system, and that’s a single-wafer producer. The Varian product doesn’t damage the chips, but some of the other companies’ products do. So we like Varian Semiconductor, as well. To read the complete Analyst Interview, click here. Ken Nagy, CFA is a senior analyst covering the semiconductor industry for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include Marsh & McLennan (MMC), NuStar (NS), Quinsa (LQU) and UTStarcom (UTSI). Get their latest posts: click here. Telenorte (TNE) - Positive Brazilian Outlook. For full Zacks research report, click here. Quilmes Industrial (LQU) - Buyout Fallout. For full Zacks research report, click here. The Week of May 28 – Jun 1 Listen to the audio podcast for Earnings Trends through Zacks’ NEW Audio Feature. Estimates Rise in Response to First-Quarter Results 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. Let’s take a look at the Zacks Put/Call Open Interest Ratio Above 1.0 filter to see if there are any interesting bullish contrarian plays. This filter singles out stocks that have acquired an abnormally high degree of put activity compared to call activity. When combined with other sentiment indicators, this filter can help you select a nice bullish addition to your portfolio. For reference, a put/call open interest ratio is simply the ratio of total put open interest to total call open interest. We compute the Schaeffer's put/call open interest ratio (SOIR) based on open interest in the front three months only. These near-term options tend to attract a more speculative crowd, the sentiment of which is more useful for shorter-term trading. Before looking at a particular stock, let's address our Schaeffer's methodology. We are contrarian-based investors, indicating that 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. Looking over the list of stocks with SOIRs above 1.0, I noticed Family Dollar Stores (FDO). FDO is the nation’s second-largest dollar store, targeting women shopping for a family with an average yearly income of $25,000. FDO operated roughly 6,300 stores in 44 states and the District of Columbia. More than half of the company’s sales come from food, health and beauty aids, and household products (known as consumables). The retailer emphasizes neighborhood stores near low- and middle-income rural and urban areas. Most of FDO’s merchandise carries a price tag less than $10. My attention was drawn to FDO due to its massive SOIR of 4.39. Not only does this reading indicate that puts outnumber calls more than 4-to-1, but it is also higher than 99% of the past year’s worth of readings. Bottom line: pessimism is running at near extreme levels toward FDO. This fact is a very nice contrarian bullish indicator should FDO’s technical performance be considered solid. ”Solid” is a good word to describe FDO’s technical performance. The stock has used the support of its 10-week and 20-week moving averages to notch 73% gains since the September 2005. No, the shares have not made an astronomical rise, but the parable of the tortoise and the hare taught me way back in elementary school that slow and steady wins the race. Technically, FDO’s intermediate-term performance isn’t sexy, but it is solid. Yes, the stock faces overhead resistance in the form of the 34 and 35 levels, but a recent bullish cross of its 20-week moving average by its 10-week counterpart is a positive technical indicator. As the shares battle overhead resistance, they should find some support from their 10-day and 20-day moving averages. Yes, the stock recently pulled back from the 34 level, but it rebounded off its 10-day moving average and appears ready to mount another challenge. Repeated attempts at breaking overhead resistance can weaken said resistance and make it more susceptible to giving way. Any good news from FDO could send the bearish options players scrambling for bullish ground, which could add a bit of momentum to the stock. This momentum could also help the stock forge through overhead resistance. As is often the case, the options players aren’t alone in their bearish feelings for FDO. Short interest increased more than 67% during April, resulting in 7.3% of the equity’s float being sold short. Combine this accumulation with the fact that it would take six days to buy back these shorted shares at their average daily trading volume and you have the makings for a nice short-covering rally. Finally, analysts are skeptical of FDO, which is another bullish contrarian indicator. Yes, six of the 13 analysts following the retailer rate it a “buy” or better, which leaves the door open for downgrades. However, my contention is that the various layers of technical support should be able to withstand any downgrades. Furthermore, the remaining seven analysts rate FDO a “hold” or worse, leaving opportunity for upgrades to add upside momentum to the stock. As always, thank you for reading and good luck in your trading! To learn more about the Most Active Call Options 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: Shoelessjoe (Rank #22 with $145,119) BIG BOOST SHORT TERM? Read More or Comment on this post. Java J (Rank #21 with $145,167) >> JAVA’S MARKET MUSINGS #60 << Read More or Comment on this post. Beris (Rank #10 with $154,197) PATIENCE ALWAYS PAYS OUT: PERU COPPER IN EXCLUSIVITY PACT REGARDING POTENTIAL ACQUISITION (CUP) 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?
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 and 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. *Zacks Rank performance is the total return (price changes + dividends) of equal weighted portfolios, consisting of those stocks with the indicated Zacks Rank, assuming zero transaction costs. These returns are not the result of a backtest; these are actual returns since 1988. The stocks in the Zacks Rank portfolios were available to Zacks clients before the beginning of each month (monthly rebalancing). Performance results from 1988 through September 2006 are based on a subset of all Zacks Rank stocks that excludes stocks covered by only one analyst and ADR’s. 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 05/17/2013
| Company Name | Symbol | %Change |
|---|---|---|
| VIASAT INC | VSAT | 19.35% |
| OLD SECOND B | OSBC | 5.76% |
| GAMCO INVEST | GBL | 4.61% |
| CORNING INC | GLW | 4.47% |
| SYNCHRONOSS | SNCR | 4.23% |
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