Tuesday - June 26, 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 – SiRF Technology (SIRF) Listen to the audio podcast on AGE through Zacks' NEW Audio Feature. AG Edwards Inc. (AGE) reported first-quarter earnings of $1.18 per share, up from $1.01 last year and nine cents above expectations. Revenues rose to $842 million from $765 million in the year-ago period. While commission revenue fell 3%, investment banking revenues surged 108% to $52 million due to higher underwriting and fee revenue. Last month, Charlotte-based Wachovia announced plans to buy A.G. Edwards for $6.8 billion and merge the St. Louis-based brokerage with Wachovia Securities. AGE has returned over 21% since being featured as a Momentum play. Read the full analysis on AGE now! On Jun 12, Morgan Stanley (MS) reported second-quarter earnings of $2.45 per share, up from $1.85 in the year-ago period and 60 cents above expectations. Driving the earnings growth, revenues rose an amazing 32% to a record $11.5 billion, also beating analysts’ estimates of $10.03 billion. Record revenues from equity sales and trading and investment banking contributed heavily to the quarter’s performance. Meanwhile, the soon to be spun-off Discover unit posted a 38% decline in pre-tax income from year-ago numbers. Read the full analysis on MS 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: Earnings and Margins This Profit Track goes to the heart of fundamental investing by finding companies with healthy earnings. The main ingredients are the search for Earnings Growth and Net Profit Margins. Then for good measure we make sure earnings estimates are moving higher which is a strong indicator of future performance and that brokerage firms are positively rating the stock. Here are four stocks that make the grade for the Earnings and Margins Profit Track: American Oriental Bioengineering Inc. (AOB) sports earnings per share growth of 48% for the most recently completed year, versus the year-prior. The company offers a net margin of 0.27. AOB recently announced the signing of a letter of intent to acquire Changchun Xinan Pharmaceutical Group Company Limited (CCXA), a privately owned plant based pharmaceutical company. In early May, the company posted first-quarter earnings of 10 cents per share, beating last year's eight cents and matching the consensus estimate. Read the full analysis on AOB now! Dynamex Inc. (DDMX) reported fiscal third-quarter earnings of 32 cents per share in early June. The result matched the consensus estimate and outperformed the year-ago total. Sales increased 19.1% from the prior year quarter. DDMX meets the criteria of this Profit Track as evidenced by its net margin of 0.04 and year-over-year earnings growth of 17%. Read the full analysis on DDMX now! PMA Capital Corp. (PMACA) released first-quarter earnings of 10 cents per share in early May. The results topped the consensus estimate by 43% and surpassed the previous year’s total. Direct premiums written for the first quarter of 2007 were up by 26%, compared to last year’s first quarter. PMACA experienced annual earnings per share growth of 120% from the year-prior. Read the full analysis on PMACA now! Universal Stainless & Alloy Products, Inc. (USAP) saw annual earnings per share growth of 50% for the most recent full year, versus the year-prior. The company’s net margin stands at 0.10. In late April, Universal Stainless & Alloy Products announced a record $1.00 per share for first-quarter earnings. The result beat the consensus estimate by 18% and was ahead of last year’s first-quarter performance. USAP stated that its record first quarter shows the ongoing benefit of the company’s investments in equipment and personnel over the past two years, which have enabled USAP to respond to strong end markets and continue its shift to higher value-added products while also improving its on-time delivery performance. 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”. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Kevin Matras explains why a good stock screener can be your best tool for picking options. More... 3. ZACKS EQUITY RESEARCH When we asked a few questions of Zacks senior Health Care analyst Chris Kallos recently, we were interested to find out where the strengths lie in this group these days, as well as over the longer-term. With relatively new government programs still keeping the Health Care industry in flux, how did your coverage perform overall in the first quarter? For the most part, 1Q07 produced slightly better-than-expected earnings amongst the HMO group, driven by solid growth of respective Medicare businesses, which managed to offset continuing weakness in the commercial segment in some cases. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Are you looking for something similar to Q1 performance in Q2? Where are you looking for the biggest changes? In recent days, seven of the largest health insurers, which included Humana (HUM) and Coventry (CVH), agreed to suspend marketing of some plans to seniors amidst allegations of misleading and aggressive sales practices. Under the voluntary agreement, the companies won't promote private so-called fee-for-service plans until Medicare officials certify they use accurate and appropriate disclaimer language. That said, we believe the impact to 2Q07 earnings will be minimal. In 1Q07, we noted a slight increase in medical loss ratios overall (medical costs as a percentage of premium revenue) amongst HMOs, and as a result will be focusing attention on this key metric for 2Q07. Lots of people have begun to look at the Health Care sector long-term. Where are its biggest areas of strength in the short-to-medium term? In our opinion, advances in medical technology, coupled with aging of the population, support a positive long-term view on the health sector overall. That said, given the aging of the population, and rising health care costs, financing care for future beneficiaries remains a challenge for government. Cost containment remains a central issue going forward, and given government initiatives such as Medicare Part D, one well suited for outsourcing to third party administrators such as managed care organizations. Notwithstanding the upcoming U.S. presidential race and associated health care rhetoric, we anticipate investor sentiment in the short term to be driven by the final 2008 Budget health care rulings and further articulation of the Bush Administration’s “Affordable Choices” initiative announced in the State of the Union address earlier this year. To read the complete Analyst Interview, click here. Chris Kallos is a senior analyst covering the Health Care industry for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include Goodyear Tire (GT), Colgate-Palmolive (CL), Johnson & Johnson (JNJ) and UST, Inc. (UST). Get their latest posts: click here. Fed to Leave Rates Unchanged UBS A.G. (UBS) - Impressive Strength Continues. For full Zacks research report, click here. Align Technologies (ALGN) - Saturated Market. 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 25 – June 29 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 Zacks High Open Interest Call Position filter last week, I decided to check back with a favorite filter of mine - the Put/Call Ratio Greater than 1.0 filter - to see what stocks face heavy pessimism from options players. A put/call open interest ratio is simply the ratio of total put open interest to total call open interest. We compute 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. After many tries, I finally found an interesting subject for today’s trading tools observation in the form of Banco Bradesco (BBD). You may wonder, who is BBD? Good thing, because I was wondering as well. According to Hoover’s, BBD is a no-frills bank that prides itself on serving low- and medium-income individuals in Brazil since the 1960s. BBD is the country’s largest private-sector bank, boasting 3,000 banking branches and is a leader in insurance and pension management. BBD also offers savings plans, leasing, auto financing, and credit card services. The firm also has offices that serve Brazilian residents and businesses in Argentina and Japan. Bradesco Securities U.S. operates in New York City, and Banco Bradesco Luxembourg provides private banking services. 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. Before looking at BBD specifically, 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 tend to use to measure overall sentiment include short interest, magazine cover stories, media comments, and analyst ratings. Technically, BBD’s performance can be classified as outstanding. Since hitting a low of 2.91 back in May 2004, the stock has added more than 750%. Yes, ladies and gentlemen, that is a 7, a 5, and a 0 to make 750. A major technical reason for the impressive gain is BBD’s 10-week and 20-week moving averages. Since June 2004, the equity has finished below these trendlines 11 times, and all during the span of May to July 2006. The stock continues to advance, as does its 10-week and 20-week moving averages. The former has provided a floor to the recent pullback, acting as support in each of the past two weeks. The long-term picture for BBD is as impressive, as its all-time nadir checks in at 1.61. Plugging that number into the same equation from before, we see that the stock has gained some 1,444%. Nice growth… BBD’s 10-month and 20-month moving averages have provided support various times throughout this impressive run higher. In fact, the last time the equity finished a month below this dynamic duo was February 2003. Now, the 10-month trendline is a bit far away (it is working its way through the 20 region while the stock trades at 24.86), but it also appears that the stock has found support at the 24 level. Apparently, pessimism toward the financial sector is blinding the options players when it comes to BBD. Now, the options are lightly traded, nonetheless, puts outnumber calls more than 4-to-1 in the front 3-month option series, resulting in a SOIR of 4.36. This reading is higher than all of those taken during the past 52 weeks, indicating that pessimism runs at extreme levels. This reading suggests that there is ample room for buying pressure to creep into the picture for BBD, which could serve to push the stock higher. According to Zacks, BBD is also a little light when it comes to analyst coverage. Only three brokerages follow the firm, deeming it worthy of one “strong buy,” and two “holds.” This configuration is a good bullish contrarian indicator, as it leaves the door open for upgrades and/or positive initiation; both of which could push the stock higher still. 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: Danny1992 (Rank #32 with $146,178 NEW STRATEGY FOR ZACKS (NYX, GMR) Read More or Comment on this post. Java J >> JAVA’S MARKET MUSINGS #80 << Read More or Comment on this post. Clark2005 TUBR TUBEAROO IS GETTING UP (TUBR) 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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