Tuesday - June 19, 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 – Hoku Scientific (HOKU) Listen to the audio podcast on MT through Zacks' NEW Audio Feature. ArcelorMittal (MT) announced that it will buy back 27 million Class A shares to offset new shares it is issuing as part of a mandatory bid for Arcelor's Latin American unit. The new buyback will come immediately after the company wraps up a current $590 million buyback. MT has soared over 20% since being featured as a momentum play. Read the full analysis on MT now! On Jun 12, Sciele Pharma, Inc. (SCRX) completed its acquisition of Alliant Pharmaceuticals, Inc. The deal is expected to provide SCRX with additional product diversification and will allow the firm to expand into pediatrics. Consensus earnings estimates for this year are up two cents to $1.67 over the past week, while profit forecasts for next year have risen by three cents to $2.01. SCRX has exceeded analysts' earnings expectations for four straight quarters. Read the full analysis on SCRX 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: Recent Price Strength This screen looks for stocks trading in the upper range of their 52-week highs along with attractive Zacks Rank and Broker Ratings. This strategy proves that the "trend is your friend" with a +35.5% return versus +4.9% for the S&P 500 in 2005. Here are four stocks that make the grade for the Recent Price Strength Profit Track: FARO Technologies, Inc. (FARO) is trading near its 52-week high and has seen its share price increase 3% over the past four weeks. In early may, the company reported first-quarter earnings of 22 cents per share, soaring past the previous year's three cents and eclipsing the consensus estimate by 57%. The company noted that ongoing strength in its sales performance, combined with gross margin improvement, sales force productivity and reduced legal expenditures drove solid first quarter earnings.. Read the full analysis on FARO now! FX Energy Inc. (FXEN) announced a first-quarter loss of seven cents per share, a narrower loss than the one year-ago loss of 12 cents. The quarterly result also beat the consensus estimate by 36%. The company stated that the most significant contributor to its improved results was the FXEN’s record quarterly oil and gas revenues of $3.5 million, versus the $1.1 million for the 2006 first quarter. The company experienced a share price increase of 17% during the past four weeks and is currently trading within reach of its 52-week high. Read the full analysis on FXEN now! Globecomm Systems, Inc. (GCOM) has advanced in share price by 4% over the past four weeks and is trading near its 52-week high. The company released fiscal third-quarter earnings of 14 cents per share, improving on last year's eight cents and matching analysts' estimates. Revenues increased by 26% on a year-over-year basis. Read the full analysis on GCOM now! Mitcham Industries, Inc. (MIND) , a Zacks #1 Rank (Strong Buy) company, has been consistently hitting new 52-week highs over the past few days. The share price of MIND increased by 24% over the past four weeks. The company recently posted fiscal first-quarter earnings of 39 cents per share, outperforming the previous year’s 33 cents and topping the consensus estimate by 30%. The company mentioned that it generated record revenues in its core equipment leasing business and saw strong demand in its equipment manufacturing and sales business. Read the full analysis on MIND 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”. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Listen to the audio podcast of the Screen of the Week through Zacks' NEW Audio Feature: Diversification and Portfolio Weighting Kevin Matras explains why a good stock screener can be your best tool for picking options. More... 3. ZACKS EQUITY RESEARCH As acquisition deals continue to be a big part of the medical devices and supplies industry lately, we thought now would be a good time for a conversation with Zacks senior medical devices and supplies analyst Greg Aurand, CFA. Mergers and acquisitions seems to be a dominant factor in medical devices and supplies. What does that landscape look like at this time? It’s an ongoing thing, really, for medical technology and supply companies to acquire new technologies to supplement their earnings growth and to expand their product portfolio. Smaller companies are constantly coming into the marketplace with newer technologies that fill in the niche areas that the larger companies may need. We had a lot of those occur in the last several years, where larger companies buy smaller companies, and I expect that trend to continue. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - For instance, Kyphon (KYPH) bought St. Francis Medical at the end of 2006 – the deal closed in January of ’07 – to expand their lumbar spine business. Symmetry Medical (SMA) bought Riley Medical, which is in the cases business. Symmetry, of course, makes components for orthopedic companies. And we see these all the time: supplemental acquisitions. What’s most interesting now, though, is what I call sort of “reverse acquisitions” or “reverse mergers,” in that we’re not seeing public companies buy companies, we’re seeing now private equity taking out companies. In particular, Bausch & Lomb (BOL), which recently received an offer from Warburg Pincus at $65 a share. Back in December, Biomet (BMET) received a private equity offer from a consortium that was recently raised to $46 a share. The interesting factor here is that both companies are troubled companies, in terms of management and compliance and accounting issues. And I think that the private equity funds –because there are a lot of funds available in the marketplace – are seeking out what they think are undervalued opportunities that are indeed troubled. High-flying companies clicking on all cylinders wouldn’t particularly interest a private equity company because there would be no upside. The troubled companies are a better target for that type of money. Are we seeing any large-cap mergers, as well? We haven’t seen any large-cap mergers in the medical technology space. Again, the more recent phenomenon has been this private equity deal where a lot of money is flushing around out in the marketplace, looking for a place to park that money, and they see some potential upside. Now I see a lot of risk in these particular deals, because Bausch & Lomb, as you may or may not be aware, went through a lot of issues with its lens care solution product last year. They had to pull it off the market, and now face over 350 lawsuits related to damages to patients who use their lens care solution. Biomet has some accounting issues related to stock options pricing. And both companies have delayed their filings now for more than a year. Bausch & Lomb recently just caught up; Biomet is still looking to file its complete filings for its most recent fiscal year. So from the accounting and management and compliance issues, both companies are sort of seeking a safe haven, in my opinion, looking to be taken out and go private, where a lot of these problems can be sort of covered up and put into the private sector rather than the public sector. To read the complete Analyst Interview, click here. Greg Aurand, CFA is a senior analyst covering the medical devices and supplies industry for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include CBS Corporation (CBS), SiRF Technology Holdings (SIRF), DTS, Inc. (DTSI) and GlobalSantaFe (GSF). Get their latest posts: click here. SiRF Technology (SIRF) - Near-Term Catalysts. For full Zacks research report, click here. Supertex (SUPX) - Revenues Weakening. For full Zacks research report, click here. Listen to the audio podcast for the Earnings Preview through Zacks' NEW Audio Feature. The Week of June 18 – June 22 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 featuring the Zacks Unusually High Option Volume filter last week, I decided to move forward and dive into some other valuable filters offered. Let’s turn an eye to July and see what companies have an out-of-the-money High Open Interest Call Position in the coming month. High out-of-the-money call open interest is an important factor, as high accumulations of bullish bets can provide a layer of resistance in a stock’s trek higher. Not only could high call open interest provide resistance, but it could also signal a level of optimism. While scanning down the list, I found several heavy hitters, including Citigroup (C), General Motors (GM), Microsoft (MSFT), and Tyco International (TYC). That said, I found the most intrigue in the high out-of-the-money open interest on Time Warner (TWX). 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 an unusually high degree of call open interest, which could signal roadblocks and/or increasing optimism. There is also a filter that sorts by high put open interest positions. Before looking at TWX, 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. Let's get back to TWX and a look at its technical performance, keeping in mind that there was heavy call open activity at the 25 level. The stock is in the midst of a pullback, but I want to look past the short term and look at a weekly chart. You will notice that the stock spent the better part of two years locked in a sideways trend channel, from which it broke out in October. After breaching the 19.50 level, the stock rocketed higher, but never even sniffed the 25 level. Notice that there is no 25 on this chart. Furthermore, the shares have spent the past two weeks wallowing below their 20-week moving average, which is rolling over and appears headed lower. This trendline could make the road higher rather difficult for TWX. Furthermore, while heavy call open interest in the July series resides at the 25 strike, peak call open interest resides at the 22.50 level. In order to make a run at 25, the stock is first going to have to overtake 22.50, which could prove to be too much. Technically, there isn’t a great deal of support, and there is a general lack of potential short-covering support as well. Slightly more than 2% of TWX’s float is sold short, and it would take four days to buy back these shorted shares at their average daily trading volume. This accumulation leaves little chance for a short squeeze, should any good news push the bears out of their shorted positions. From a longer-term perspective, the stock has marched steadily higher, but it has been a slow process. Yes, the shares enjoy the support of their 10-month and 20-month moving averages, but again, the advance has been almost excruciatingly slow. Furthermore, the last time TWX finished a month above the 25 level was January 2002. Despite this slow march higher, the speculative options crowd remains bullishly positioned. TWX’s Schaeffer’s put/call open interest ratio (SOIR) of 0.45 is lower than 89% of the past year’s worth of readings. This low percentile ranking flies in the face of the stock’s performance. Of course, that is what we like to see as contrarians: heavy optimism toward a struggling/stagnant stock. Furthermore, analysts are firmly in the bearish camp for TWX. According to Zacks, TWX racks up 12 “strong buy” rankings, 2 “buys,” and 1 “hold.” This ratings configuration leaves too much room for downgrades, which could quickly follow as analysts flip sides, thanks to the recent pullback. 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, and 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: Beris (Rank #7 with $169,119) FRONTEER FLASHES AGAIN, THIS TIME WITH GOLD (FRG) Read More or Comment on this post. Clark2005 THREE STOCKS FOR WATCHING TODAY – (CMED, JSDA, ACH) Read More or Comment on this post. MackTheKnife THREE SHORT STORIES (INFN, MNCP, USU) 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 05/17/2013
| 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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