Tuesday - June 12, 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 31.9% 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 – Akamai Technologies (AKAM) Listen to the audio podcast on DE through Zacks' NEW Audio Feature. John Deere & Co. (DE) announced that it will acquire Ningbo benye Tractor & Automobile Manufacture Co., a south-China manufacturer. The purchase will allow Deere to sell small, low-horsepower tractors in combination with the larger machines it currently sells in China. DE is currently up over 22% year-to-date. Read the full analysis on DE now! The Board of Directors at Celanese Corp. (CE) authorized the repurchase of up to $330 million of its common stock. Consensus earnings estimates for this year are up 13 cents to $3.18, while profit forecasts for next year have risen 25 cents to $3.31 over the past two months. CE has returned nearly 20% since it was first featured as a Value pick on Mar 21. Read the full analysis on CE 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: Low Price Stocks Many investors prefer stocks priced below $20 because the low prices allow them to accumulate more shares. Fortunately, lower prices do not necessarily mean lower quality. This strategy identifies stocks priced below $20 that are trading at discount valuations and have a Zacks Rank of #1 ("Strong Buy") or #2 ("Buy"). The stocks identified by this search strategy trade at price-to-sales (P/S) multiples of 1.0 or below. The strong Zacks Rank is indicative of positive revisions in earnings estimates. Combining these characteristics can result in high-dollar returns. Here are four stocks that make the grade for the Low Price Stocks Profit Track: Advocat Inc. (AVCA) is trading around the $12 level. The company posted first-quarter earnings of 21 cents per share in early May, outperforming the consensus estimate by 91%. Revenue of $54.6 million was up 3.7% on a year-over-year basis. AVCA meets the criteria for this Profit Track as evidenced by its price-to-sales multiple of 0.34 and earnings per share profitability of $2.52 over the past 12 months. Read the full analysis on AVCA now! Books-A-Million, Inc. (BAMM) reported first-quarter earnings of 13 cents per share in late May, exceeding the consensus estimate by 8% and surpassing last year’s nine cents. The company mentioned that several categories performed well with new age, teen, graphic novels and hardcover fiction showing particular strength. Books-A-Million earned $1.16 per share during the past 12 months and sports a price-to-sales multiple of 0.60. Read the full analysis on BAMM now! Phoenix Companies, Inc. (PNX), which is trading around $15.50, is a Zacks #1 Rank (Strong Buy) company. PNX offers a price-to-sales multiple of 0.69. During the past 12 months, PNX earned $1.21 per share. The company announced first-quarter earnings of 33 cents per share, jumping ahead of the consensus estimate by 43.5% and outperforming the year-prior result. Phoenix Companies stated that this quarter provides a strong start to the year for both top and bottom line growth and continues the favorable results of last year's second half. Read the full analysis on PNX now! Sealy Corp. (ZZ) released its fiscal first-quarter report in early April. Net sales increased 4.3% to $412.6 million from the previous year’s $395.7 million on unit volume growth of 12.2%. The company noted that the momentum in domestic volume that has been building continued during the first quarter as unit growth turned positive, due primarily to strength in Sealy’s promotional and specialty product lines. The company’s price-to-sales multiple stands at 0.94, and it experienced earnings per share profitability of $1.09 over the past 12 months. Read the full analysis on ZZ 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”. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Kevin Matras explains why a good stock screener can be your best tool for picking options. More... 3. ZACKS EQUITY RESEARCH There are several issues currently ongoing in the technology industry, so we thought it would be a good idea to check with senior technology analyst Steve Biggs, CFA to see what he expects from his coverage, looking ahead. We’re seeing signs of inflation in the economy these days. What affect do you expect this will have on tech companies? Well, a strong economy is always an important factor for tech, as it’s very sensitive to capital spending. And in fact, inflation could be somewhat of a positive, as companies look to gain efficiencies through other means than hiring employees. So as the market tightens, companies are going to be more willing to look for other efficiencies and look for cost savings that they can achieve through implementing new technology solutions. Improved software to automate functions that have been done manually in the past. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Are you talking mostly on the enterprise side, though? Yeah, mostly on the enterprise side – and that’s the bulk of the companies I cover, those that sell into the enterprise side. How about for those companies you do cover on the consumer side? Are the inflationary aspects of the economy going to, perhaps, hurt some of these companies? That could be somewhat of a negative. If you’re looking at, say, a Sony Corp. (SNE) or a consumer electronics company, obviously the less money consumers have to spend would come back and hurt these companies. But for the most part, anything involved in the enterprise side should do OK. You know, a strong economy has typically been a good indication for tech companies. Now there’s also an issue of “commoditization of hardware” currently ongoing. Can you tell us a little bit about this? Well, sure. Companies are having a harder and harder time keeping up with the commoditization and price declines in hardware. For example, within, say, the server market, as we go towards more Intel INTC and AMD AMD –based machines and away from the larger Unix-based machines, prices have declined very rapidly. It’s benefited some of the companies that specialize in this kind of stuff. Obviously, Dell DELL was a beneficiary of it, although they’re having some problems in other areas such as PCs. They certainly benefited from this trend in servers as well as a few others, like Rackable Systems RACK and some of the software companies. Another thing you’re seeing is virtualization of servers, and that’s going to continue to grow as Intel and AMD release more powerful processors that can handle more functions – such as the two-way processors that are going to continue to increase to four, then eight, and on and on over the next few years. So that becomes a benefit to some of the software companies that enable server virtualization. Opsware OPSW is one that I cover that’s a beneficiary of that. Also, EMC (EMC) is spinning out – a portion, at least – with its VMware, which enables virtualization. So that’s another company that’s going to benefit from the software end of it. But going back to the other side, EMC on the hardware side is a victim of commoditization itself, as Dell’s lower cost storage devices are taking share from EMC. To read the complete Analyst Interview, click here. Steve Biggs, CFA is a senior analyst covering aspects of the technology sector for Zacks Equity and Small-Cap Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include PeopleSupport (PSPT), LifeCell Corporation (LIFC), Navarre (NAVR) and Gilead Sciences (GILD). Get their latest posts: click here. PeopleSupport (PSPT) - Good Entry Point. For full Zacks research report, click here. Avnet, Inc. (AVT) - Highly Risky. For full Zacks research report, click here. The Week of June 11 – June 15 Health Care, Materials and Industrial Expected to Lead Second Quarter Growth Parade 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. After checking in with the High Open Interest Call Position filter last week, I decided to move forward and dive into some of the other valuable filters available. With this week's heavy selling, this filter caught my eye. Now, put activity amid a market sell-off is not out of the ordinary, as traders are looking frantically to protect their investments. However, when you weigh that activity against the stock's technical factors, this heavy put activity can offer up interesting investing opportunities for the bullishly inclined. Thinking along those lines, I scanned the companies at the top of Friday's list. We had some of the big players in the options pits, like Apple (AAPL), Lowe's (LOW), and Nortel Networks (NT). But with Apple garnering headlines left and right, Lowe's getting pressure from the housing market, and Nortel embroiled in speculation regarding a potential buyout of Avaya (AV), I decided to press a bit further onward for a stock without a headline reason for being on the list. That's when I arrived at Dell (DELL). The company has just come off a solid preliminary earnings report, topping the Street's estimate, and an announcement that it was cutting its workforce to lower costs and increase competition with Hewlett-Packard (HP). With these supposedly solid drivers in the news, it seems quite out of the ordinary for DELL to be listed on the filter. Before we dive any deeper into technicals and sentiment, a little background is in order. What is the filter? Well, let’s first define a put and a call. A put is simply a bet that the underlying stock is going to move lower, while a call is a bet that the underlying stock is going to move higher. According to our Expectational Analysis® methodology, heavy attention paid 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 put activity recently, providing us with a pool of securities that could fit the bill for a nice long position. You can sort the results either alphabetically by underlying issue, or from highest call activity to lowest call activity. Before looking at DELL more in depth, 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. Returning to DELL, we have a company that has demonstrated strengthening fundamentals with solid earnings and a plan for increased competition with a key rival. Meanwhile, the shares have a bit of a rocky past on the technical front. Since peaking at $42.57 in December 2004, the shares have been in decline mode under their 10-month and 20-month moving averages. However, the security has shown resiliency lately, rebounding from support in the 20 region to reclaim potential support at these long-term trendlines. On a short-term basis, DELL has rallied more than 25% since hitting a near-term low of $21.61 in March. Throughout this bounce, the equity has enjoyed the support of its 10-day and 20-day moving averages. Furthermore, DELL has outperformed the tech-laden Nasdaq Composite (COMP - 2,554.9) on a daily relative-strength basis during this time frame. There is a caveat however, as the security is in danger of setting a double top at the 27.50 level. This region rejected DELL in January and is continuing to create a bit of a hurdle for the shares to overcome. However, unlike in January, investors aren't looking for DELL to extend its current rally. Sentiment has deteriorated into the bearish nether regions, which is seen as a boon for the shares from a contrarian perspective. For example, options players have been very pessimistic lately, as evidenced by the stock's appearance in the filter. Furthermore, DELL's Schaeffer's put/call open interest ratio (SOIR) of 0.85 ranks above 83% of all those taken during the past year, adding credence to this pessimistic stance on the shares by speculators. The result of this pessimism is more than 90,000 puts taking up residence at the stock's June, July, and August series of options. From our experience, heavy accumulations of put options can act as support for a security, thus providing a potential springboard for DELL in the event of any slippage in the shares. Meanwhile, analysts are firmly entrenched in the bearish camp for DELL. According to Zacks, 14 of the 23 brokerage firms offering up an opinion on the stock rate it a "hold." While the company did garner an upgrade following its preliminary earnings report, there is still plenty of room for more analysts to follow suit. It is this wealth of pessimism that can still unwind in buying pressure that makes DELL a potentially solid addition to any bullish portfolio. Keep an eye on the 27.50 level, as a breach of this region could certainly be considered a "buy" signal on the shares. 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 Volume Calls 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 #2 with $175,966) MAINTAINS STATISTICALLY SIGNIFICANT BENEFIT ON ALL FIVE EFFICACY ENDPOINTS IN ALZHEIMER’S DISEASE TRIAL AFTER ONE YEAR OF THERAPY (MDVN) This is a huge market now and will grow even more in the future. This was a good report by not great! If you decide to play it, be careful not to pay too much. I have other choices… Read More or Comment on this post. Java J (Rank #44 with $137,077) >> Java’s Market Musings #70 << Read More or Comment on this post. Stockboy911 A LOOK AT THIS BIOTECH 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 55,000 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. *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 05/21/2013
| Company Name | Symbol | %Change |
|---|---|---|
| SCIENTIFIC L | SCIL | 8.00% |
| NATUS MEDICA | BABY | 6.11% |
| SUMMER INFAN | SUMR | 6.02% |
| RADIANT LOGI | RLGT | 5.32% |
| NEW ORIENTAL | EDU | 4.51% |
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