Archive for 'P/E ratio'

The constantly changing market always presents opportunities to make a profit. The key is to always be prepared for the coming changes and get in early.

The S&P 500 Index (NYSEARCA:SPY) – often used as a measure of the overall market – is trading at the highest multiples it has seen in over a decade. At roughly 17 times forward earnings, value investors are having a more difficult time than ever looking for names in which to invest. With that in mind, I have laid out what sectors are “must-avoids” as they are the most expensive as well as a few sectors that look like they could be the beneficiary of a value-oriented comeback in the market.

As I laid out in significantly more detail in one of my latest articles, Value Is About To Make A Comeback In A Big Way, I anticipate that value stocks are about to outperform growth stocks over the next five years for the following reasons:

  • Value has lagged growth since mid-2010, with the gap widening especially over the past year.

  • Value has been shown to outperform over longer periods of time.

  • Fearful investors will flee expensive growth stocks in anticipation of a market correction.

  • Most importantly of all, however, growth will significantly underperform value in a rising-rate environment.

See more here

Autotrading is a relatively new feature at most brokerages that allows an investor’s trading account to mirror that of a professional.

OptionGenius.com, an option trading advisory service, just launched their autotrade feature this week in conjunction with TradeMonster.com, a registered broker/dealer, to be able to offer autotrading to their members. Through autotrading, members of the OptionGenius.com advisory that have a brokerage account at TradeMonster.com can opt to have the OptionGenius.com trades executed in their TradeMonster.com account automatically.

“Normally we email trades to members and they have to log into their brokerage accounts and try to execute their own orders. But if the member does not have time to trade when the trade alert is issued or is not near a computer, the member may miss the trade. This is no longer a problem because the broker will execute the trade for the member as soon as they get the trade alert from us,” says Allen Sama, Head Trader at OptionGenius.com.

The individual investor keeps total control of his money. At no time does the trading advisory have access to his funds or account. Autotrading is an agreement between the trader and the brokerage company.

In the case of OptionGenius, members of this service would notify TradeMonster.com that they wish to autotrade with OptionGenius. Once the trading account is updated, every time a trade alert is issued by OptionGenius, TradeMonster.com will attempt to execute the trade for the member in their trading account. The member can then login and change the trade at any time. Members also choose how much to invest in each trade.

As with all trading, there are risks individual investors need to be aware of. The trade may not get executed. If the limit price in the trade alert is not attainable the trade will expire without getting filled. Also, the trade may lose money.

“Autotrading gives the average person, who works full time and cannot trade during the day, the ability to take advantage of trading options and learn at the same time. Our members are not required to use this feature and there is no extra charge for it,” says Sama.

About Option Genius LLC

Option Genius LLC aims to help individual investors earn above-average returns by using conservative option trading strategies and proper money management. Monthly returns of 8-10% are common.

Contact:
Allen Sama
OptionGenius.com
832-287-3348
help@optiongenius.com
http://www.optiongenius.com

Web Site: http://www.optiongenius.com

The Greenbrier Companies, Inc. (NYSE: GBX) announced today that it intends to offer, subject to market and other conditions, $200 million aggregate principal amount of Convertible Senior Notes due 2018 (the “Notes”).  Greenbrier intends to grant the initial purchasers a 30-day over-allotment option to purchase up to an additional $15 million aggregate principal amount of Notes on the same terms and conditions.

Greenbrier intends to use the net proceeds from the offering, together with additional cash on hand, to (i) purchase any and all of Greenbrier’s outstanding $235 million aggregate principal amount of its 8 3/8% senior notes due 2015 (the “2015 Notes”) that are tendered pursuant to a cash tender offer and consent solicitation, also announced by Greenbrier today, (ii) pay the consent and other fees in connection with such cash tender offer and consent solicitation and (iii) redeem or otherwise retire any and all 2015 Notes that remain outstanding following consummation of the cash tender offer.

The Notes will be convertible into shares of Greenbrier’s common stock, based on a conversion rate to be determined.  Interest on the Notes will be payable semiannually in arrears on April 1 and October 1 of each year, beginning on October 1, 2011.  The Notes will mature on April 1, 2018, unless earlier repurchased by us or converted in accordance with their terms prior to such date.  The interest rate, conversion rate, conversion price and other terms of the Notes will be determined at the time of pricing of the offering.  The Notes will be Greenbrier’s senior unsecured obligations and will rank equally with all of its existing and future senior unsecured debt and senior to all of its existing and future subordinated debt.

The Notes will be offered in the United States only to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).  The Notes and the shares of Greenbrier common stock issuable upon conversion of the Notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.  This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.  This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This release may contain forward-looking statements, including statements regarding the Company’s anticipated convertible note offering and the terms thereof, and the anticipated use of proceeds therefrom. Greenbrier uses words such as “anticipates,” “believes,” “forecast,” “potential,” “contemplates,” “expects,” “intends,” “plans,” “seeks,” “estimates,” “could,” “would,” “will,” “may,” “can,” and similar expressions to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual results to differ materially from in the results contemplated by the forward-looking statements. Factors that might cause such a difference include, but are not limited to, reported backlog is not indicative of our financial results; turmoil in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of our indebtedness; write-downs of goodwill, intangibles and other assets in future periods; sufficient availability of borrowing capacity; fluctuations in demand for newly manufactured railcars or failure to obtain orders as anticipated in developing forecasts; loss of one or more significant customers; customer payment defaults or related issues; actual future costs and the availability of materials and a trained workforce; failure to design or manufacture new products or technologies or to achieve certification or market acceptance of new products or technologies; steel or specialty component price fluctuations and availability and scrap surcharges; changes in product mix and the mix between segments; labor disputes, energy shortages or operating difficulties that might disrupt manufacturing operations or the flow of cargo; production difficulties and product delivery delays as a result of, among other matters, changing technologies or non-performance of subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; difficulties associated with governmental regulation, including environmental liabilities; integration of current or future acquisitions; succession planning; as well as the other factors as may be discussed in more detail under the headings “Risk Factors” and “Forward Looking Statements” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2010 and our Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2010, and our other reports on file with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof. Except as otherwise required by law, we do not assume any obligation to update any forward-looking statements.

CONTACT: Mark Rittenbaum, +1-503-684-7000

Web Site: http://www.gbrx.com

Dreyfus Integrates Unique Mutual Fund Strategy

Dreyfus Integrates Unique Mutual Fund Strategy-Image via Wikipedia

Two BNY Mellon Asset Management Boutiques Collaborate in Emerging Markets Strategy Encompassing Equities, Bonds, Currencies

The Dreyfus Corporation (Dreyfus), part of BNY Mellon Asset Management, announced today that it has launched the Dreyfus Total Emerging Markets Fund, an actively managed mutual fund that seeks to create a portfolio comprised of the most attractive opportunities in emerging markets equities, bonds and currencies.

Dreyfus, the fund’s investment adviser, will use the combined investment strategy employed by Dreyfus portfolio managers who are dual employees of Standish Mellon Asset Management Company LLC (Standish) and The Boston Company Asset Management, LLC (TBCAM), both investment boutiques of BNY Mellon Asset Management.  The fund’s portfolio managers responsible for the fund’s equity investments and those responsible for fixed income investments will share asset allocation and country selection decisions.  Standish’s investment strategy will be used for purposes of making decisions related to fixed income securities and currencies.  TBCAM’s investment strategy will be used for purposes of making investment decisions related to equities.

The strategy is integrated since the fund’s portfolio managers will jointly assess investment opportunities in each emerging markets country by asset class as opposed to simply deciding on the overall asset allocation split for the entire portfolio and then managing the equity and fixed income sleeves separately.

“This strategy is unique,” said Jon Baum, Chairman and CEO of Dreyfus.  “Dreyfus Total Emerging Markets Fund offers something that you cannot get with a traditional fund-of-funds approach.  The fund’s portfolio managers employ a country-by-country analysis to assess the risk and return expectations for equities, bonds and currencies.  The fund’s assets are then allocated to the more attractive emerging market asset classes, countries and individual securities.”

“There is not a lot of overlap between the emerging markets equity and fixed income universe – only about a 50% intersection,” Baum continued.  “This integrated approach offers the potential for an expanded investment universe and, therefore, an investor has the potential to diversify its country level risk – an important factor in emerging markets investing.”

To pursue its goal, Dreyfus Total Emerging Markets Fund normally invests at least 80% of its assets in the securities of emerging market issuers and other investments that are tied economically to emerging market countries.  The fund’s portfolio managers have experience with investing in emerging markets equities, local currency and U.S. dollar-denominated emerging markets bonds, and currencies.  For each asset class, security selection is based on an established investment process.

Sean P. Fitzgibbon, CFA, and Alexander Kozhemiakin, Ph.D., CFA, serve as the fund’s primary portfolio managers responsible for the fund’s equity and fixed income investments, respectively.   Fitzgibbon is a senior managing director, portfolio manager, research analyst and head of the global core equity team at TBCAM.  Kozhemiakin is the managing director of emerging market strategies and a senior portfolio manager at Standish.  Fitzgibbon and Kozhemiakin also are employees of Dreyfus and manage the fund in that capacity.

For further information on Dreyfus Total Emerging Markets Fund, contact 1-800-554-4611.

-The ability of the fund to achieve its investment goal depends, in part, on the ability of the fund’s portfolio managers to allocate effectively the fund’s assets among emerging market equities, bonds and currencies. There can be no assurance that the actual allocations will be effective in achieving the fund’s investment goal.

-Equity funds are subject generally to market, market sector, liquidity, issuer, and investment style risks, among other factors, to varying degrees.

-Bond funds are subject to interest rate, credit, liquidity, call, derivative and market risks in varying degrees. Generally, bond prices move in the opposite direction of interest rate changes.

-Investing internationally involves special risks, including changes in currency exchange rates, political, economic and social instability, a lack of comprehensive company information, differing auditing and legal standards and less market liquidity. These risks are generally greater with emerging market countries than with more economically and politically established foreign countries.

-Because the fund invests primarily in emerging markets issuers, the fund’s performance is expected to be closely tied to social, political and economic conditions within those markets and to be more volatile than the performance of more geographically diversified funds.

-Investments in foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged. Foreign currencies are also subject to risks caused by inflation, interest rates, budget deficits and low savings rates, political factors and government interaction and control.

-The use of derivative instruments, such as options, futures and options on futures, forward contracts, swaps, options on swaps, and other credit derivatives, involves risks different from, or possibly greater than, the risks associated with investing directly in the underlying assets. A small investment in derivatives could have a potentially large impact on the fund’s performance.

For more complete information on the fund, including investment risks associated with an investment in the fund, please refer to the fund’s prospectus.

Notes to Editors:

The Dreyfus Corporation, established in 1951 and headquartered in New York City, is one of the nation’s leading asset management and distribution companies, currently managing more than $400 billion in mutual funds and separately managed accounts.

Standish Mellon Asset Management Company LLC, with $79 billion of assets under management, provides investment management services across a broad spectrum of fixed income asset classes. These include corporate credit (investment-grade and high-yield), emerging markets debt (dollar-denominated and local currency), core / core plus and opportunistic (U.S. and global) strategies. Of its total assets under management, $8.5 billion constitutes emerging market debt mandates.  Standish also offers full service capabilities in Insurance and Global Workout Solutions. The firm also includes assets managed by Standish personnel acting as dual officers of The Dreyfus Corporation and The Bank of New York Mellon.

The Boston Company Asset Management, LLC, a BNY Mellon Asset Management investment boutique, manages $39 billion in assets for more than 450 clients worldwide.  Of its total assets under management, $10.5 billion constitutes emerging market mandates. The firm specializes in providing a broad range of actively managed U.S., global, emerging markets and alternative products with a fundamentally based approach to security research implemented in a consistent and disciplined fashion. It provides investment management services for corporate, public, mutual funds and Taft-Hartley retirement plans, endowments and foundations. The firm also includes assets managed by The Boston Company personnel acting as dual officers of The Dreyfus Corporation and The Bank of New York Mellon.

BNY Mellon Asset Management is the umbrella organization for BNY Mellon’s affiliated investment management firms and global distribution companies.

BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets.  BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team.  It has $25.0 trillion in assets under custody and administration and $1.17 trillion in assets under management, services $12.0 trillion in outstanding debt and processes global payments averaging $1.6 trillion per day.  BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK).  Additional information is available at www.bnymellon.com.

All information source BNY Mellon Asset Management as of December 31, 2010. This press release is qualified for issuance in the US only and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. This press release is issued by BNY Mellon Asset Management to members of the financial press and media and the information contained herein should not be construed as investment advice.  Past performance is not a guide to future performance.

A BNY Mellon Company(SM)

CONTACT: Patrice M. Kozlowski, +1-212-922-6030, kozlowski.pm@dreyfus.com

Web Site: http://www.bnymellon.com

Zacks Bull and Bear Highlights

Zacks Equity Research highlights: Superior Industries (NYSE: SUP) as the Bull of the Day and Novatel Wireless (Nasdaq: NVTL) as the Bear of the Day. In addition, Zacks Equity Research provides analysis Verizon Communications Inc. (NYSE: VZ), Terremark Worldwide Inc. (Nasdaq: TMRK) and AT&T Inc. (NYSE: T).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.

Here is a synopsis of all five stocks:

Bull of the Day:

Superior Industries (NYSE: SUP) has a wide customer base. Moreover, its long-term business agreements with clients have helped maintain financial stability. With its competent management, strategic acquisitions, divestments and production efficiencies, the company is well positioned to take full advantage of the globally expanding automotive industry.

In addition, Superior Industries has no long-term debt obligations. Its fourth quarter results were strong, with earnings outperforming the Zacks Consensus Estimate by $0.45 per share.

Given these conditions, we have maintained our Outperform recommendation on shares of the company and set a target price of $29.

Bear of the Day:

We reaffirm our long-term Underperform recommendation on Novatel Wireless (Nasdaq: NVTL) following its fourth quarter 2010 financial results, which fell well below the Zacks Consensus Estimate. Novatel provided a very weak first quarter 2011 financial outlook.

The company cited lower sales of its 3G products and ongoing customer transition to next-generation 4G products are the primary reasons for this poor guidance. The recent trend of the 3G USB modem industry is indicating a glut of inventory on the part of the wireless carriers. Several industry sources predicted that Verizon, an important customer of Novatel for its MiFi intelligent hotspot, may generate lukewarm demand in the first quarter of 2011 attributable to its huge modem inventory.

Novatel is now facing increasing competitive pressure from Asian equipment developers. We do not find any immediate catalyst for Novatel and expects the company to continue to lose money in 2011.

Latest Posts on the Zacks Analyst Blog:

Verizon Issues Debt

For now, still the largest wireless carrier in the North America, Verizon Communications Inc. (NYSE: VZ), announced a debt issuance of  $6.25 billion. The issue will spread over five tranches of $1 billion three-year floating-rate notes, $1.5 billion three-year fixed-rate notes, $1.25 billion five-year fixed-rate bonds, $1.5 billion 10-year fixed-rate bonds and $1 billion of 30-year fixed-rate debt.

Verizon’s debt sale represents its first debt sale since 2009 (issued $2.75 billion of 10 and 30 year debts in March 2009) and the second largest deal after the second-largest dollar-denominated debt sale in 2011.

The company expects to use the proceeds out of the issue to pay commercial paper debt as well as for general corporate purposes. Currently, the company has $3.7 billion of commercial paper outstanding, bearing interest at an average rate of 0.40%. Further, Verizon expects to sell up to $14 billion in common stock, preferred shares and debt.

Verizon exhibits a strong balance sheet with $2 billion in cash and a reduced long-term debt of $45.3 billion from 46.1 billion in 2009. Currently, the company has net debt-to-EBITDA ratio of about 1.3 times.

Given the strong financial position, Verizon  is further set to  acquire information-technology and cloud-computing specialist Terremark Worldwide Inc. (Nasdaq: TMRK) for $1.4 billion as reported in January and expects the deal to be completed by month end. Given the on going acquisition, the company has positioned itself for growth in cloud services.

The acquisition represents Verizon’s enthusiasm to rapidly enter the cloud computing market that delivers corporate IT services over the Internet rather than an in-house IT department. The deal is expected to  support Verizon’s growth initiatives in remote or cloud computing, an area in which it has been lagging competitors like AT&T Inc. (NYSE: T).

Currently, we maintain long-term Neutral recommendation on Verizon with a Zacks #3 Rank (Hold

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks “Profit from the Pros” e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=7158.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it’s your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4582.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter:  http://twitter.com/ZacksResearch

Join us on Facebook:  http://www.facebook.com/ZacksInvestmentResearch

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.

Contacts:
Mark Vickery
312-265-9380
Visit: www.zacks.com

Web Site: http://www.zacks.com

Zacks Analyst Blog Updates

Zacks.com Analyst Blog features: Citigroup Inc. (NYSE: C), JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corporation (NYSE: BAC), Wells Fargo & Company (NYSE: WFC) and American International Group Inc. (NYSE: AIG).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579

Here are highlights from Tuesday’s Analyst Blog:

Citi Plans Reverse Stock Split

On Monday, Citigroup Inc. (NYSE: C) announced a reverse stock split plan of its common stock and its intention of reinstating dividend payment to shareholders.

According to the nature of the reverse stock split, 10 shares of issued and outstanding Citi common stock will be combined into one share of common stock without any change in the par value per share after the close of trading on May 6, 2011. Moreover, the number of outstanding shares of Citi common stock will be reduced to 2.9 billion from approximately 29 billion. Citi common stock will continue trading on the New York Stock Exchange (NYSE) under the symbol “C” but under a new CUSIP number.

No fractional shares will be issued in the reverse stock split. However, shareholders holding a fractional share of common stock will be paid cash.

Further, Citi plans to restore a quarterly dividend of 1 cent per common share in the second quarter of 2011, following the reverse stock split.

Previously, Citi’s quarterly dividend spiked to 54 cents per share in 2007, prior to the financial crisis. With a financial crisis starting to effect major banks in late 2007, Citi cut its dividend to 32 cents per share for the first three quarters of 2008. In October 2008, the dividend was reduced to 16 cents. Further, in January 2009, it was decreased to one cent. Since April 2009, Citi stopped the payment of dividends.

Currently, the actions taken by Citi followed Fed’s approval of dividend increase and stock buyback after the completion of stress tests over banks’ financial position, which would definitely boost investors’ confidence in the U.S. Banks.

Citi was one of the 19 banks that were subjected to “stress tests” conducted by the Federal Reserve. Due to the recession, Fed had put restrictions on increasing banks’ dividends and share buybacks in exchange of the bailout money. Following the repayment of the bailout money, many banks started exerting pressure on the regulators to let them restore their dividends.

This long expected decision was a major milestone for the banking sector, signaling that the notified banks have fully come out of the effects of the financial crisis. This paved the way for these banks to reinstate dividends and buy back shares.

These banks, including big names such as JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corporation (NYSE: BAC) and Wells Fargo & Company (NYSE: WFC), needed to show that they had adequate capital to address potential losses over the next two years under various scenarios.

This marks the strength in Citi’s business model, reflecting the company’s commitment to return value to shareholders coupled with its strong cash generation capabilities. Citi has been affected drastically by the subprime mortgage crisis. To avoid bankruptcy, the company took several steps over the past two years. We believe that through the reverse stock split, investors’ sentiments will be positive in the near term. Investors would be attracted toward investing in higher-priced stocks.

Citi is strategizing its plans and is focusing on its core businesses to support economic growth. However, growth depends entirely on banking, which provides loans to small businesses and providing capital.

At the end of 2010, the U.S Treasury sold its remaining shares of common stock, earning $12 billion in profit for taxpayers on the investment in Citi. Since 2006, full-year 2010 was a complete profitable year for Citi with all four quarters reporting cumulative positive net income of $10.6 billion.

Though restructuring initiatives are encouraging, the revenue headwind remains a concern. The shrinking of its business through assets sale, the CARD Act and the financial reform law continue to challenge revenue. We believe that solid earnings at Citi would remain elusive until its revenue experiences decent growth. On the flip side, reverse splits are not always successful as shares of American International Group Inc. (NYSE: AIG) fell in 2009 after the company cut its share count in a 1-for-20 reverse split.

Citi currently retains its Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. Further, considering the fundamentals, we are maintaining a long-term “Neutral” recommendation on the stock.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5514.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks “Profit from the Pros” e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5516

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it’s your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4580.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter:  http://twitter.com/ZacksResearch

Join us on Facebook:  http://www.facebook.com/ZacksInvestmentResearch

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.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Web Site: http://www.zacks.com

Zacks List of Earning Surprises

Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes: Best Buy (NYSE: BBY), Darden Restaurants (NYSE: DRI), Discover Financial (NYSE: DFS), Oracle (Nasdaq: ORCL) and Walgreen (NYSE: WAG).

To see more earnings analysis, visit http://at.zacks.com/?id=3207.

Every day, Zacks.com makes 4 stock picks available, free of charge. To see them, go to http://at.zacks.com/?id=3567.

First Clues to First Quarter

The fourth quarter earnings season is over, but now we are starting to get a few first quarter reports (and a few stragglers for the fourth quarter, many of which are ADRs). That makes for a very light overall earnings week. A total of just 76 firms are due to report. However, an unusually high number of those are members of the S&P 500 — 17.

The fourth quarter earnings season was a strong one, and this week should start to provide clues if that will be true for the first quarter as well. The firms reporting this week include: Best Buy (NYSE: BBY), Darden Restaurants (NYSE: DRI), Discover Financial (NYSE: DFS), Oracle (Nasdaq: ORCL) and Walgreen’s (NYSE: WAG).

It will be a moderate week for economic data. Not a lot of reports, but the ones we will get are important, including both New and Used Home Sales, new orders for Durable Goods and the final look at GDP growth in the fourth quarter. With a very light week for earnings, and a fairly weak week for economic data, the markets will probably be focused on the international crisis du joir and on the budget negotiations.

Monday

  • Existing Home Sales are expected to dip to a seasonally adjusted annual rate of 5.05 million from 5.36 million. What is more significant will be the level of inventories, and if the January months of supply rate of 7.6 months can continue to decline. While down from last summer, the level is still extremely high and indicates strong downward pressure on home prices. That really is what to watch in the existing home sales numbers, since the amount of economic activity generated by an existing home changing hands is not really that big a deal. Home prices are a very big deal. Unfortunately, it looks like they are falling again.

Tuesday

  • No major economic reports are expected.

Wednesday

  • New Home Sales are expected to edge up to an annual rate of 288,000 from 284,000. While a 1.4% increase might look OK, it is coming off an extremely depressed base. In fact, the lowest nine months of New Home Sales on record have been in the last nine months, and if the consensus estimate is hit, make that ten of ten. It is hard to overestimate the importance of New Home Sales to the overall economy, especially in the early stages of an economic recovery. The low level of New Home Sales (and hence the low level of homebuilding activity) is the principal reason that this recovery has been so anemic. Every home built generates a huge amount of economic activity that feeds through the entire economy. With the possible exception of the GDP report, this is the most important economic data of the week.

Thursday

  • Weekly initial claims for unemployment insurance come out. After being extremely erratic over the holidays, they have started to fall significantly, but are still bouncing around a bit. Last week they fell by 16,000 to 385,000. I would expect the downward trend in claims to continue next week. The consensus is looking for a minor decline to 384,000. A level of 385,000 seems pretty good compared to the experience of the last few years. After a huge downtrend from mid-April through the end of 2009, initial claims were locked in a tight “trading range” for most of 2010. We now appear to have broken out of that trading range to the downside. This could well indicate that the economy is about to start producing a significant number of new jobs. The four-week moving average (which smoothes out the week-to-week noise) was under the 400,000 for the third week in a row. Historically that has been an inflection point at which the economy starts to add significant numbers of jobs.
  • Continuing claims have also in a downtrend of late, but the road down has been bumpy. Last week they fell by 80,000 to 3.706 million. That is down 988,000 from a year ago. I would expect a further decline this week. Some of the longer term decline due to people simply exhausting their regular state benefits which run out after 26 weeks. But those don’t last forever either. Federally paid extended claims rose by 54,000 to 4.303 million, and are down by 1.690 million over the last year. Looking at just the regular continuing claims numbers is a serious mistake. They only include a little over half of the unemployed now given the unprecedentedly high duration of unemployment figures. A better measure is the total number of people getting unemployment benefits, currently at 8.954 million, which is up 181,000,000 from last week. The total number of people getting benefits is now 2.769 million below year ago levels. What is not known is how many people have left the extended claims via the road to prosperity, finding a new job, and how many have left on the road to poverty, having simply exhausted even the extended benefits. Make sure to look at both sets of numbers!  Many of the press reports will not, but we will here at Zacks.
  • New Orders for Durable Goods are expected to have risen by 0.9% in February. That would be on top of a 2.7% rise in January. These numbers are frequently revised, and most forecasters think that the January numbers are more likely to be revised up than down. The January increase was due to a big percentage gain in orders for Transportation equipment, most notably civilian aircraft. Those orders had fallen to nearly nothing in December, so it was mostly a “division by zero effect.” That is an extremely “lumpy” area for new orders, as just a few jumbo jets can swamp order growth or declines for the rest of the economy in any given month. Excluding transportation equipment, orders actually fell by 3.6% in January. That number is also likely to be revised to show a smaller decline. For February, growth of 1.8% is expected. Changing the base can have a significant effect on the month-to-month change, and are worth paying attention too.

Friday

  • We get the final look at the Big Kahuna, GDP growth in the fourth quarter. While that might be a bit of “old news,” it is the most comprehensive measure of how well the economy is doing. In the first look, GDP grew at an annual rate of 3.2%, but the second peak at the data showed a big downward revision to just 2.8% growth. While that was a acceleration from the 2.6% in the third quarter, it was widely seen as being a disappointment. The quality of the growth was, however, far better than that of either the second or third quarters. The growth came from higher consumer spending and an improvement in net exports, not from simply re-stocking of inventories. The composition of growth is just as important and the overall level of growth. For the final look at the data, the consensus is looking for a small upward revision to 2.9% growth.

Dirk Van Dijk, CFA, is the Chief Equity Strategist for Zacks.com.

About the Zacks Rank

Since 1988, the Zacks Rank has proven that “Earnings estimate revisions are the most powerful force impacting stock prices.” Since inception in 1988, #1 Rank Stocks have generated an average annual return of +28%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have significantly underperformed the S&P 500 (+2% versus +9%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

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About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros.  In short, it’s your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros by going to http://at.zacks.com/?id=3568.

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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.

Contact: Dirk Van Dijk, CFA
Company: Zacks.com
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Web Site: http://www.zacks.com

Zacks Picks for the Long Haul

Buy growth stocks!  Who cares about value?

Successful investors care…that’s who.

No matter how much a company is expected to grow earnings, you will lose if you over pay for the stock. Peter Lynch is living proof. He is best known for crushing the market with a concept known as GARP (Growth At a Reasonable Price). He realized that overpaying for a stock would cause 1 of 2 negative things to happen:

1) You will take on too much risk given the potential reward which leads to underperformance.

Or

2) Stocks priced for perfection tend to unravel quickly once the big growth rates are not going to be realized. This leads to getting slaughtered.

Okay. But how do I go about valuing these growth stocks?

It’s important to stop relying on the P/E ratio…sort of. That’s because it only takes into account one year’s worth of earnings and we want stocks that are going to flourish for the long haul.

The key is to find value relative to the long-term growth which is easily accomplished with the PEG Ratio. You get there by dividing the stock’s current P/E ratio by its long term projected growth rate. The result is a ratio that allows you to compare any two stocks relative value no matter how much they are expected to grow earnings.

For example, you have 2 stocks; Stock A has a PE of 24 and Stock B’s is 15. Stock B looks like the cheaper stock to most investors.

Now what you were told that Stock A will grow at 30% per year and B will grow just 10%. That gives Stock A an attractive PEG of 0.8 while Stock B has an inflated 1.5. Long story short, be sure to use PEG to find undervalued growth stocks.

It can’t be that easy. Can it?

You’re right. There is much more than just the PEG ratio to consider. Once you have a stock that looks fairly valued (a PEG near 1.0), the key is to find out if the projections are feasible.  One quick reference tool is the Price-to-Sales ratio (P/S).

You see, earnings can be tweaked and inflated by a creative accounting staff. However, sales are much more cut and dry. You sold it or you didn’t. If there is a big discrepancy in perceived value between the PEG and the P/S, you need to dig deeper.

One great clue is the statement of cash flows. If a company isn’t generating cash through its day-to-day business (operating cash flow) then the odds of them hitting those earnings targets, let alone staying in business, are pretty slim.

Additionally, you may need to dissect the profit margin, ROE and any number of other financial metrics to get the true story of an aggressive growth company.

Sounds like a lot of work

It can be. There is no such thing as a free lunch. So, roll your sleeves up and dig in. Anyone can see how much company’s earnings are supposed to grow this year. But the great investors are willing to put in the extra effort to find stocks that have earnings, and more importantly, share prices that will surge for years to come.

You will find most of the resources needed to analyze aggressive growth stocks on free websites like Yahoo Finance and Zacks.com. However, it will still require many hours of work each month to help pick the best stocks.

There is an easier way.

This week, Zacks Investment Research launched a new home run approach to stock investing. According to the company’s aggressive growth expert Bill Wilton, it narrows down the strongest Zacks Rank stocks to the few that have exceptional potential to blast through the normal one-to-three-month profit zones. They could continue to generate positive earnings surprises quarter after quarter, and see massive upside to their stock prices.

To get +50%, +100% and even +200% winners, we are prepared to ride such stocks up to 12 and 24 months to their maximum potential. If this approach is of interest to you, then please check out the first picks from our new Home Run Investor portfolio.

About Zacks Investment Research

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms.  It monitors more than 200,000 earnings estimates, looking for changes.

Then, when changes are discovered, they’re applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock-picking system continues to outperform the market by a nearly 3-to-1 margin.

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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.

Contact:
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Growth Stocks Poised to Lead the Market Higher

Calamos Investments, a premier global fund manager, highlights the potential opportunities of growth equities emphasizing the belief that the current investing environment contains significant long-term opportunity for growth, fueled by the mega-trend of increasing consumerism around the world. We also believe growth equities are relatively inexpensive when compared to history as well as to corporate bonds and that the Calamos Investment Team is finding attractive opportunities in equities, particularly in high-quality growth companies.

Calamos Advisors LLC CEO and Co-Chief Investment Officer John P. Calamos, Sr. says, “We see growth opportunities in the marketplace and believe well-positioned investors can benefit from current trends. We believe the world is growing, current valuations are compelling and growth stocks of innovative companies are poised to lead the market higher.”

Why Growth? Why Now?

Despite some market volatility, we believe now is an exciting and opportune time for U.S. and global growth, and we believe U.S. businesses can lead this trend with increases in productivity and continued advances in technology. We are seeing some of the best relative opportunities in the valuations and fundamentals of growth stocks in decades.

In the current environment, price/earnings ratios indicate that growth stocks are trading at a small premium relative to value stocks. In our view, this implies an opportunity to purchase growth companies at some of the most attractive prices we have seen in 20 years.

Another trend fueling our positive views on growth equities is that we believe a global economic recovery is underway, and that an emergence of a middle class around the world is a strong long-cycle trend. We believe this growing consumerism and infrastructure build-out in developing economies will help fuel profits of U.S. companies that have a global footprint and are meeting these demands.

The Calamos Growth Equity Funds

We believe this scenario provides opportunities for investors. For more information on the Calamos Growth Fund (A Shares: CVGRX; C Shares: CVGCX; I Shares: CGRIX) and other growth equity solutions, as well as supporting GrowthWorks resources, including educational brochures, investment commentaries and webinars about growth equities, visit www.calamos.com/growthworks.

About Calamos

Calamos Investments is a globally diversified investment firm offering equity, fixed-income, convertible and alternative investment strategies, among others. The firm serves institutions and individuals around the world via separately managed accounts and a family of open-end and closed- end funds, providing a risk-managed approach to capital appreciation and income-producing strategies. For more information, visit www.calamos.com.

Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

Important Risk Information

An investment in the Funds is subject to risk, and you could lose money on your investment in the Fund.  There can be no assurance that the Fund will achieve its investment objective. An investment in the Fund is not a deposit in a bank and is not insured or guaranteed by the FDIC or any other government agency.  The risk associated with an investment in the Fund can increase during times of significant market volatility.

The principal risks of investing in the Calamos Growth Fund include: equity security risk, growth stock risk, mid-sized company risk, foreign securities risk and portfolio selection risk.

As a result of political or economic instability in foreign countries, there can be special risks associated with investing in foreign securities, including fluctuations in currency exchange rates, increased price volatility and difficulty obtaining information.  In addition, emerging markets may present additional risk due to potential for greater economic and political instability in less developed countries.

Russell 1000® Growth Index–Measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.

Russell 1000® Value Index–Measures the performance of those companies in the Russell 1000® Index with lower price-to-book ratios and lower forecasted growth values.

Price/Earnings Ratio is the current stock price over trailing 12-month earnings per share. Unmanaged index returns assume reinvestment of any and all distributions and, unlike fund returns, do not reflect fees, expenses or sales charges. Investors cannot index invest directly in an index.

Unmanaged index returns assume reinvestment of any and all distributions and, unlike fund returns, do not reflect fees, expenses or sales charges. Investors can not invest directly in an index.

The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions are may not necessarily come to pass. Information contained herein is for informational purposes only and should not be considered investment advice.

Before investing, carefully consider the Fund’s investment objectives, risks, charges and expenses. Please see the prospectus containing this and other information or call 800.582.6959. Read it carefully.

http://www.calamos.com