Monday - July 2, 2007
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1. ZACKS RANK BUY STOCKS
Zacks #1 Rank 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 - Compania de Minas Buenaventura S.A.A. (BVN)
Compania de Minas Buenaventura S.A.A. (BVN) is taking positive steps to increase shareholder value. The company recently unwound a portion of its gold hedge book, which will allow it to take advantage of rising gold prices. Earnings estimates for this year have risen 21 cents to $3.28 per share over the past 90 days. Next year's estimates have jumped an even more impressive 54 cents to $3.32 per share. The stock has a terrific ROE of 28%. Read the full analysis on BVN now!
Growth & Income - Tidewater, Inc. (TDW)
Tidewater, Inc. (TDW) exceeded analysts’ earnings expectations for 10 consecutive quarters by an average margin of 8.1%. TDW reported solid fourth-quarter and full-year results in late April. This Zacks #1 Rank stock has a current dividend yield of 0.85% and a five-year average dividend yield of 1.68%. Earnings per share are projected to grow 56% over the next 3-5 years. Read the full analysis on TDW now!
Momentum - TBS International (TBSI)
TBS International (TBSI) has skyrocketed a mind-blowing 209% year-to-date. Growing cargo volumes and new businesses have helped TBS International exceed earnings estimates by double-digit percentages for three straight quarters. Read the full analysis on TBSI now!
Value - Terra Industries, Inc. (TRA)
Terra Industries, Inc. (TRA) exceeded analysts’ earnings expectations in two out of the past three quarters by an average margin of 97.7%. Consensus earnings estimates for both this quarter and the full year have risen over the past week. This Zacks #1 Rank stock is authorized to repurchase 9.5 million shares by Jun 30, 2008. TRA is currently trading at a valuation of 14.8x current fiscal-year estimated earnings and at 11.7x next fiscal-year estimated earnings. Read the full analysis on TRA now!
Zacks Rank Resources
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
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 0.32 and earnings per share profitability of $2.52 over the past 12 months. Continue your research 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 0.54. BAMM is currently trading around near $17. Continue your research on BAMM now!
Phoenix Companies, Inc. (PNX), which is trading around $15.00, announced first-quarter earnings of 33 cents per share in early May, 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. PNX offers a price-to-sales multiple of 0.66. During the past 12 months, PNX earned $1.21 per share. Continue your research 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 0.95, and it experienced earnings per share profitability of $1.09 over the past 12 months. Results for the second quarter will be available on July 10, 2007. The company’s current share price is around $16.50. Continue your research 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 looks at how to use Price and Volume for locking in profits, cutting losses and spotting potential trend changes. Read more...
3. ZACKS EQUITY RESEARCH
If the government releases an employment report and no one is around to read it, does it still have an impact?
June employment numbers will be released on Friday, July 6 and, combined with Monday’s (July 2) ISM manufacturing survey, will provide updated information about the strength of the economy. The problem is that many financial professionals could be out on vacation. One fund manager proclaimed at a recent luncheon that she didn’t know who would be working during the week of the Fourth. With a federal holiday smack in the middle of the week and kids out of school, it does seem likely that quite a few people will be taking some time off.
More. . .
If volume is lower than average, then trading could be choppy. Second-quarter earnings season will not start until July 9, with Alcoa’s (AA) report; however, the bulk of profit news won’t start being released until the latter half of the month.
Earnings news during the holiday week will be very limited, with just five companies scheduled to report. The largest of the group is Laidlaw International (LI), which has a market capitalization of about $2.7 billion.
On the economic front, May factory orders and pending home sales data will be released on Tuesday. Thursday has its usual weekly initial jobless claims and the June ISM non-manufacturing index. As I said before, the holiday week starts with the June ISM manufacturing index (Monday) and ends with the June employment numbers (Friday).
The stock exchanges will close early on Tuesday, at 1 p.m. EST, and the U.S. financial markets will be closed on Wednesday in observance of Independence Day. On behalf of everyone at Zacks, I wish you a happy and safe Fourth of July.
Charles Rotblut, CFA, is the senior market analyst for Zacks.com. He can be reached at firstname.lastname@example.org.
Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include Palm (PALM), Avon Products (AVP), 3Com (COMS) and Tesoro Corp. (TSO). To see their latest posts, click here.
Listen to the audio podcast of Earnings Trends through Zacks' NEW Audio Feature.
4. RESEARCH DIGEST
What is Wall Street saying about your stocks? You'll find the answer in our exclusive Research Digest reports. Here is a synopsis of stocks with recent broker upgrades:
Edison International (EIX) is an electric power generator and distributor. It is also one of the largest players in the renewable energy field, which analysts appreciate because it gives the company a competitive advantage over its peers. Analysts polled by Zacks Research Digest also like the company’s strong balance sheet and cash position, as well as its strong cash flow generated from international sales. Edison International’s Average Broker Recommendation has risen to 1.75. Read the Research Digest report on EIX
National Semiconductor Corporation (NSM) which creates high-value analog devices and subsystems, has watched its Average Broker Recommendation advance to 1.85. The company restructured its business with asset sales and plant closures, which analysts at Zacks Research Digest believe is one of its key positive arguments. Better mix, cost reductions and a sharper focus on higher-end analog business contributed to a record fiscal year 2007 gross margin and profitability. This, in turn, caused growth expectations to increase. Other favorable aspects that analysts appreciate include its commitment to product line, operating leverage and lean customer inventory levels. Read the Research Digest report on NSM
Coca-Cola Enterprises (CCE) enjoyed a recent brokerage upgrade that helped its Average Broker Recommendation rise to 2.33. Over the past three months, earnings estimates for this Zacks #2 Rank company are up approximately 2.5%. Analysts polled by Zacks Research Digest like CCE’s strong pipeline of products, which should boost topline growth. Furthermore, strong spending by Coca-Cola will support key products. Analysts also appreciate that the company maintains disciplined cost control. In fact, lower interest expense has offset recent operation cost increases. Read the Research Digest report on CCE
Applied Biosystems Group (ABI), an Applera Corporation business, is a Zacks #2 Rank company with an Average Broker Recommendation that has recently advanced to 1.90. The group serves the life science industry and research community by developing and marketing instrument-based systems, consumables, software and services. Analysts polled by Zacks Research Digest appreciate the company’s leadership position in its field, as it maintains the top spot in DNA sequencers, DNA synthesis and PCR. Looking forward, analysts believe the company will continue benefiting from R&D spending by pharmaceutical and biotechnology companies, as well as academia. Read the Research Digest report on APC
5. FEATURED EXPERTS
Here we cast the spotlight on timely Featured Expert commentaries that recently appeared on Zacks.com.
Twin Pillars of Quality and Value
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 at.
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Regards and Happy Investing,
Charles Rotblut, CFA
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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.
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