Tuesday - August 7, 2007
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Dear Subscriber, You may have received an email yesterday with the subject line of "Pros Buy prospective tech stocks" or “Zacks Elite Order #641104” which referenced the stock PXLW. This was not a legitimate email communication or solicitation from Zacks Investment Research, Inc., Zacks.com or any other Zacks entity. It was, rather, a form of "phishing" email as well as a fraudulent attempt to induce you to purchase the stock referenced in the original email. It's important to note that this fraudulent email did NOT represent any breach of ANY of Zacks systems, servers or databases. The spammers only used our brand and replica of email format to make their message seem legitimate as is too often done with other well known brands such as eBay and Amazon. We are extremely sensitive to spamming and it is not a business practice of ours. Rest assured that Zacks Investment Research and Zacks.com will always respect your privacy and will continue to provide the highest quality stock research and commentary available. Wishing you prosperity, Charles Rotblut, CFA 1. ZACKS RANK BUY STOCKS Zacks #1 Rank stocks average a 32.2% 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 – Sirenza Microdevices (SMDI Listen to the audio podcast on BEAV through Zacks' NEW Audio Feature. B/E Aerospace Inc. (BEAV) reported a sixth consecutive double-digit earnings surprise for the second quarter. Earnings rose to 39 cents per share versus 24 cents last year and four cents above expectations. Revenues rose to $398.2 million, up 46.7% year over year. The company also increased its full-year 2007 and 2008 guidance. Year to date, BEAV has soared over 59%. The stock is up 9.2% since its feature as a Momentum play. Read the full analysis on BEAV now! Deutsche Bank AG (DB) posted second-quarter profits of $1.53 per share. With analysts calling for $1.30 per share, the company surprised by a solid 17.7%. The result also represented a 30.0% year-over-year improvement. AXE has now beaten the Street's estimate in 11 consecutive quarters. Revenues increased 21.8% to $1.51 billion. Consensus earnings estimates continue to trend higher for the company. Read the full analysis on DB 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: Arrow Electronics Inc. (ARW) has a debt to equity level of 0.36 and its current ratio stands at 1.90. The company reported second-quarter results in late July. Adjusted earnings per share of 81 cents matched the consensus estimate and outperformed the previous year’s 77 cents. ARW stated that it achieved record sales, generated an impressive level of cash flow and managed its asset base to a record low level of working capital to sales. Read the full analysis on ARW now! Avnet, Inc. (AVT) will release financial results for the fiscal fourth quarter on August 8, 2007. The company reported fiscal third-quarter earnings of 73 cents per share, excluding charges, in late April. The result outpaced the consensus estimate by 6% and exceeded the year-ago total. Avnet's quarterly earnings per share have been ahead of Wall Street expectations for the past five consecutive quarters. AVT's debt to equity level is 0.36 and its current ratio is 2.03. Read the full analysis on AVT now! Culp, Inc. (CFI) reported fiscal fourth-quarter earnings of 14 cents per share in mid-June, eclipsing the consensus estimate by 40%. The company mentioned that its fourth-quarter performance marked a solid finish to a year of important strategic and operational changes. Culp satisfies the criteria of this Profit Track with a PEG ratio of 0.77 and a price to sales multiple of 0.60. Read the full analysis on CFI now! Western Digital Corp. (WDC) recently released fiscal fourth-quarter results, noting that it leveraged significant investments over the last five years into a strong technology portfolio and compelling products. WDC added that it is well-positioned to address the diverse and growing use of hard drives in commercial and consumer markets for years to come. The company's debt to equity level is a low 0.01 and its current ratio stands at 1.80. Read the full analysis on WDC 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 for the Screen of the Week through Zacks' NEW Audio Feature. Relative Price Strength Screen Kevin Matras goes over a Relative Price Strength strategy for finding winning stocks in all markets. More... 3. ZACKS EQUITY RESEARCH With grocery prices having gotten noticeably higher over the past several weeks, we thought we would check to see if this issue has led to any positive impact in Q2 earnings for consumer goods companies within the coverage of senior analyst Steven Ralston, CFA. How has earnings season treated consumer goods thus far? Second quarter earnings have been a mixed bag. Positive surprises were reported by Pepsi Bottling Group (PBG), Colgate Palmolive (CL), and UST Inc. (UST), while Hershey Foods (HSY), Anheuser-Busch Companies (BUD), and Avon Products (AVP) reported disappointing results. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - In addition, the drivers were mixed. PBG’s earnings were driven by productivity and cost-savings initiatives, since volume growth was only 1%. On the other hand, Colgate achieved 8% worldwide volume growth due to double-digit sales growth from new product launches and effective marketing. Conversely, Hershey experienced higher input costs, which was exacerbated by difficulty in passing on price increases. Anheuser-Busch was able to pass on higher prices as revenue per barrel rose 3.1%, but sales-to-retailers were below expectations resulting in the company's U.S. market share falling to 48.8%. Food prices have been climbing as of late. Is this improving margins for many companies in your coverage? An environment of rising food prices is a double-edged sword. Usually higher food prices can only be implemented during periods of rising input costs; during other times, competitive marketing dynamics negate any one company’s attempt to raise prices since competitors hold prices flat in order to gain market share. In inflationary periods of input costs, when both consumers and competitors are willing to accept higher food prices, volume elasticity from the price increases contributes to a sales volume decline. Complicating the process, customer forward-buying in advance of the price increases causes volume declines in the subsequent quarter. The operating income of food companies decreases, primarily due to the combination of higher input costs and lower volume. These factors offset the positive net pricing actions and result in gross margin contraction. Managements of better-run companies proactively implement productivity initiatives in order to maintain or improve the company’s operating margin. However, in order to boost sales after implementing price increases, companies must increase marketing expenses, which offsets the benefits derived from the productivity programs. To read the complete Analyst Interview, click here. Steven Ralston, CFA is a Zacks analyst covering a variety of companies in various industries of Business Services and the Consumer sector. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include Aegon (AEG), Denbury Resources (DNR), Chalco (ACH) and Lockheed Martin (LMT). Get their latest posts: click here. Pepsi Bottling Group (PBG) - Executing Well. For full Zacks research report, click here. Alcatel-Lucent (ALU) - Declining Margins. For full Zacks research report, click here. Listen to the audio podcast for the Earnings Preview through Zacks' NEW Audio Feature:
The Week of Aug 6 – Aug 10 Listen to the audio podcast for Earnings Trends through Zacks' NEW Audio Feature:
Finishing With a Flourish 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. Last week, Joseph Hargett walked us through the Unusually High Option Volume filter. This week, let's check back in on an old favorite – the Zacks Put/Call Ratio Greater than 1.0 filter, a key sentiment indicator we use here at Schaeffer's. My goal for this week's column was to find a stock with strong technical support to counter its inflated put/call ratio. First, a word about the put/call open interest ratio, which 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. The company that caught my eye this week was Plains All American Pipeline (PAA). Who, you might ask? Well, according to none other than PAA itself (via a recent press release), "Plains All American Pipeline, L.P. is a publicly traded master limited partnership engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products. Through its 50% ownership in PAA/Vulcan Gas Storage LLC, the partnership also develops and operates natural gas storage facilities. The Partnership is headquartered in Houston, Texas." This should answer your question – unless your question involves the origin of the word "terminalling." Before we dive any deeper into technicals and sentiment for PAA, 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 PAA 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 use to measure overall sentiment include short interest, magazine cover stories, media comments, and analyst ratings. Technically, PAA has been a consistently strong performer. Support from the stock's 10-month and 20-month moving averages has held since January 2003, during which time the equity has increased in value by 129%. After spending much of 2007 gapping above this double-barreled support, PAA is now consolidating into its 10-month trendline, which could turn the shares higher. Focusing in on the equity's more recent price action, we see that PAA has entered a bit of a slump. This drop can be attributed to two factors: The broad market's recent pullback, for one; and for another, PAA recently completed the $52 million acquisition of a major storage facility near Phoenix, Arizona. However, this decline should not cause too much concern as of yet. A daily chart of the equity's progress reveals that its ascent has been occasionally punctuated by periods of consolidation before continuing higher. Additionally, while the stock has breached support from its 50-day level, its 150-day trendline served as a springboard for the shares in yesterday's trading. The stock is now trading safely above this newly tested support. Also, as mentioned above, the security is still looking down at support from its longer-term trendlines. Option traders don't seem to have taken much notice of PAA's long-term ascent and technical strength. As our helpful Put/Call Ratio Greater than 1.0 filter reveals, the stock's SOIR is 5.90 – indicating that put contracts outnumber call contracts among near-term options by almost six to one. This buildup of pessimistic positions on the stock could easily unwind in the form of buying pressure should the stock's rally continue. Short sellers have also helped lay the groundwork for a potential short-covering rally. While only about 1% of the stock's available float has been sold short, it would take nearly a week's worth of trading days (4.4, to be specific) for the PAA shorts to buy back their positions on the stock. Additionally, this figure reveals that short interest has increased by 23% from the prior reporting period. This rise in pessimism toward a technically strong stock is exactly what we look for when we're seeking out a potential contrarian play. 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: MackTheKnife (Rank #11 with $169,154) CUTTING YOUR RISK: FREE YOUR MIND Read More or Comment on this post. Danny1992 GET SOME SHORT POSITION Read More or Comment on this post. Java J >> JAVA’S MARKET MUSINGS #109 << 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 06/19/2013
| Company Name | Symbol | %Change |
|---|---|---|
| SONIC FOUNDR | SOFO | 4.40% |
| SUPPORTCOM I | SPRT | 3.75% |
| UNISYS CORP | UIS | 3.31% |
| SHORETEL INC | SHOR | 3.22% |
| GREEN MOUNTA | GMCR | 3.13% |
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