Tuesday - October 2, 2007
 Want to view the archive of past issues? Click here. Manage Profit from the Pros subscription: 1. ZACKS RANK BUY STOCKS Zacks #1 Rank stocks average a 32% 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 - Aetna (AET) The Board of Directors at American Science and Engineering (ASEI) on Friday received a $13.1 million contract from the Pentagon to provide services for their X-ray equipped vans used to check suspected vehicles. AS&E has been providing their Backscatter vans overseas for the last three years. Under the renewed contract, AS&E will provide support services for the current fleet of vans. Read the full analysis on ASEI now! FMC Corp. (FMC) announced on Sep 25 that it will increase its soda ash prices by $15 a ton. This increase will be effective Oct 1 and will be for all grades, both bulk and packaged. Consensus earnings estimates for both this year and next year have been trending higher for FMC. Read the full analysis on FMC 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: Return on Equity One of the quickest ways to gauge whether a company is creating assets or gobbling up investor's cash is to look at their Return On Equity (ROE). The fast moving ROE Profit Track screening strategy from Zacks.com has generated an impressive return of +21.4% in 2005. In 2006, it continued to outperform the S&P 500, returning +27.0% versus the S&P 500 rise of +16.7%. Here are four stocks that make the grade for the Return on Equity Profit Track: Calumet Specialty Products Partners LP (CLMT) reported second-quarter results in early August, stating that it improved its overall performance compared to the second quarter of 2006 primarily through increased gross profit in its Fuel Products segment. The quarterly report also cited an increased second-quarter distribution of 63 cents per unit that was paid on August 14, 2007. CLMT offers a ROE of 39.07 and a price to sales ratio of 0.51. Read the full analysis on CLMT now! Cenveo, Inc. (CVO) sports a ROE of 74.52 and a price to sales ratio of 0.69. In late August, Cenveo announced that it completed its purchase of Commercial Envelope Manufacturing Co., Inc. ("Commercial Envelope"). In discussing the acquisition, CVO noted that it is excited to begin the process of forming the leading envelope manufacturer in the United States. In early August, the company posted second-quarter non-GAAP income from continuing operations of 25 cents, eclipsing the previous year's 16 cents and matching the consensus estimate. Read the full analysis on CVO now! Comfort Systems USA, Inc. (FIX) released results for the second quarter in early August. Earnings per share of 25 cents outperformed the year-ago 19 cents and beat the consensus estimate by 14%. The company also declared a quarterly dividend of $0.035 per share in early August, which was paid on September 20, 2007. Comfort Systems'
ROE stands at 11.79 and its price to sales ratio is 0.54. Read the full analysis on FIX now! Insight Enterprises Inc. (NSIT), which is trading near an all time high, satisfies the criteria of this Profit Track as evidenced by its ROE of 10.72 and its price to sales ratio is 0.28. In early August, the company announced second-quarter earnings of 54 cents per share. The result surpassed the consensus estimate by 8% and improved on last year's total. Read the full analysis on NSIT 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 shows how to pick the best industries with the Zacks Rank, and offers a unique way to create tie-breakers. More... 3. ZACKS EQUITY RESEARCH The past few years have demonstrated very robust spending in the defense industry, especially in light of our ongoing presence in Iraq and Afghanistan. We sat down with Zacks senior Aerospace/Defense industry analyst John Nelson Simon to find out where the focus is in that industry at the present time. What's new in development for the defense industry these days? Each time the United States military engages a new enemy, our hardware, software, weapons systems, communication & control equipment are tested. The engagement in Iraq has revealed major flaws in moving troops on the ground. Humvees, which were never designed to engage in combat, have been shown to be too frail to repel bullets and non-resistant to armor penetrating munitions - plus the wheels are surprisingly easy to blow off - thereby putting our troops into much danger. The response to this challenge has been orders for Mine-Resistant Ambush-Protected vehicles (MRAPs). More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Do you already know which companies are making -- or are planning to make -- these MRAPs? There are roughly a dozen or so competitors for the MRAP business; however, the bulk of the orders thus far have gone to Force Protection (FRPT), BAE Systems, Navistar and General Dynamics (GD). What's the budget for these vehicles? The Department of Defense (DoD) hopes to ultimately procure 15,374 MRAPs over the next three years, of which 7,774 have already been approved by the Joint Requirement Oversight Council. The estimated price tag for the 7,774 vehicles is $11.4 billion, but that could easily double if MRO (maintenance, repair and overhaul) is included in the estimate, for these vehicles operate on mean streets. Nice business if you can get a piece of it. As for specific final numbers, that appears to be a moving target, for, at one point, the DoD was considering ordering 20,000 or so MRAPs. So far, the U.S. military has actually placed orders for 6,415 MRAPs. Have they been performing well thus far in the field? What does the future hold for MRAP builders? There are no simple answers to those questions. Since November 2006, we believe only 375 MRAPs have been delivered to the war zone, including, in the last few weeks, 42 of the 14-ton, four-wheel-drive Category I MRAPs and 13 of the 24- ton, six-wheel-drive Category II MRAPs. The expectation is that many more will be delivered by year-end. However, the impetus to accelerate the delivery and transport of MRAPs to Iraq would be diminished if we commit to winding down our activities in that country, which may or may not happen in the next 12-14 months. Also, there is the issue of questions regarding the long-term viability of the MRAP program itself, particularly in light of a competing product: the JLTV. To read the complete Analyst Interview, click here. John Nelson Simon is a senior analyst covering the aerospace and defense industries for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include Greatbatch (GB), Lattice Semiconductor (LSCC), FactSet Research Systems (FDS) and XenoPort (XNPT). Get their latest posts: click here. Dollar Financial (DLLR) - Strong Growth. For full Zacks research report, click here. Altria Group (MO) - Litigation & Weak Volume. For full Zacks research report, click here. Listen to the audio podcast for Earnings Preview through Zacks' Audio Feature. The Week of Oct 1 - Oct 5 Listen to the audio podcast for Earnings Trends through Zacks' NEW Audio Feature. Will Earnings Surprise to the Upside Again? 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. This week, we'll stick with what my colleague Elizabeth Harrow called a perennial favorite: The Zacks Put/Call Ratio Greater than 1.0 filter. 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. Scanning over the list of stocks, a few tickers jumped out at me, but the one that spoke to me more than the others was Take-Two Interactive Software (TTWO). I was surprised to see a SOIR of 3.78 toward the video-game producer. This ratio suggests that nearly four puts are open for each call in the front three months of options on TTWO; moreover, it is higher than 98% of those readings taken during the past 52 weeks. This reading suggests that the bearish sentiment is running near a 52-week high. Before we dive any deeper into technicals and sentiment for TTWO, 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(R) 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 TTWO 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. Turning back to TTWO, maybe some of the pessimism is deserved, as the stock has pulled back a bit. However, things are looking up, and the company is expecting to see positive earnings in the fourth quarter (more on that in a moment). The stock is facing overhead resistance in the form of the 18 level. Now, overhead call open interest isn't massive; in fact, I would venture to say that it is a non-entity, especially since the 17.50 level is the site of peak call open interest. Should the stock advance through 18, expect further resistance at the 20 level. Narrowing our focus a bit, you will see that the shares can thank their 10-day moving average for their recent comeback. This trendline has helped guide the stock higher since August and may become the biggest ally in TTWO's climb. Further evidence of a continued run higher is that the 10-day trendline recently completed a bullish cross of its 20-day cohort; oftentimes this formation is bullish in nature. Now, we already know that options players are extremely pessimistic toward TTWO, but they aren't alone. Let's look at analysts first. According to Zacks, 11 of the 13 analysts following the firm rate it a "hold" or worse. Any good news could push this bearish bunch to the bullish side, dragging the stock higher in the process. The biggest upside catalyst for TTWO lies in its short interest. The percentage of TTWO shares sold short as float comes in at a massive 43%. In addition, it would take nearly 15 days to buy back these shorted shares at their average daily trading volume. Again, any good news could send the stock soaring higher on the wings of a short-covering rally, which could eliminate a good chunk of any overhead resistance. So, what news rests on the horizon for TTWO? Well, we still have the company's fourth-quarter earnings report, which could provide a spark. According to the latest earnings report, TTWO believes that it will see a "nice jump" from its latest game Bioshock, thanks to stellar reviews. In addition, TTWO announced that it has established a family-friendly label called 2K Play. The unit will develop casual and family games and will include titles that fall under the wildly popular Dora the Explorer and Go Diego Go franchises. Watch for sales of these games to be solid thanks to the Nickelodeon name, audience, and advertising power. 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 Put/Call Open Interest Ratio 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: Lilnev2000 CURRENCY ETFS - ALTERNATE WAY TO PROTECT YOURSELF FROM THE FALLING US DOLLAR All of those factors will keep China's growth strong in the short and long term. Now an interesting twist is that China is preparing... Read More or Comment on this post. Beris (Rank #55 with $163,816) DOW ON THE VERGE OF A BREAKOUT! Read More or Comment on this post. Grimmreaper (Rank #50 with $167,554) THREE PICKS AND A SPEC THAT SHOULD BEAT THE MARKET THIS WEEK 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. FREE PORTFOLIO TRACKER Do you believe that these events affect stock prices?
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Zacks #1 Stocks on the Move 05/22/2013
| Company Name | Symbol | %Change |
|---|---|---|
| ALLIANCE FIB | AFOP | 11.78% |
| A M R CP | AAMRQ | 7.91% |
| TRI TECH HOL | TRIT | 7.35% |
| NOAH HOLDING | NOAH | 6.92% |
| SONIC FOUNDR | SOFO | 6.92% |
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