Archive for 'Zacks'

Zacks Releases Latest Sell List

Zacks.com releases details on a group of stocks that are currently members of the exclusive Zacks #5 Rank List – Stocks to Sell Now. These stocks are currently rated as a Zacks Rank #5 (Strong Sell): Knight Transportation (NYSE: KNX) and The Advisory Board Company (Nasdaq: ALEX). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Landauer, Inc. (Nasdaq: LDR) and Harbin Electric, Inc. (Nasdaq: KRBN). To see the full Zacks #5 Rank List – Stocks to Sell Now visit: http://at.zacks.com/?id=92

 

Since inception in 1988, the S&P 500 has outperformed the Zacks #5 Rank List of Stocks to Sell Now by 80% annually (+2% vs. +10%). While the rest of Wall Street continued to tout stocks during the market declines of the last few years, Zacks told investors which stocks to sell or avoid.

Here is a synopsis of why KNX and ALEX have a Zacks Rank of #5 (Strong Sell) and should most likely be sold or avoided for the next one to three months. Note that a #5 Strong Sell rating is applied to 5% of all the stocks in the Zacks Rank universe:

Knight Transportation (NYSE: KNX) announced first -quarter earnings of 12 cents per share on April 20 that missed analysts’ expectations by 29%. This apart the earnings missed the previous year’s earnings results by 3 cents. The Zacks Consensus Estimate for the current year slipped 7 cents to 82 cents per share in the last 30 days as 21 out of the 25 covering analysts reduced estimates. Next year’s estimate dipped 6 cents to $1.02 per share in that time span.

The Advisory Board Company (Nasdaq: ALEX) posted a first-quarter profit of 20 cents per share yesterday, which came in 24 cents wider than the average forecast. The diluted earnings per share fell 7 cents to a profit of 3 cents on March 2011 as compared to results of March 2010. The Zacks Consensus Estimate for the full year fell 22 cents to a profit of $1.76 per share from $1.98 over the past couple of months. For 2012, analysts expect a profit of $2.41 per share, compared to projections of a profit of $2.46 per share in a span of 60 days.

Here is a synopsis of why LDR and HRBN have a Zacks Rank of 4 (Sell) and should also most likely be sold or avoided for the next one to three months. Note that a #4 Sell rating is applied to 15% of all the stocks ranked by Zacks;

Landauer, Inc.‘s (Nasdaq: LDR) second-quarter profit of 63 cents per share, posted on May 3, lagged analysts’ projections by nearly 6%. For 2011, the Zacks Consensus Estimate moved down a penny to a profit of $2.69 per share in the last 7 days as 1analyst out of 3 cut back on forecasts. Estimate for next year slid 6 cents to a profit of $2.96 per share during that time period.

Harbin Electric, Inc. (Nasdaq: KRBN) reported a fourth-quarter profit of 50 cents per share on March 16 that fell 17% short of the Zacks Consensus Estimate. The full-year average forecast is currently $3.02 per share, compared to projections of $3.04 made 60 days back. Next year’s forecast dropped 1 cent to $3.52 per share in the same period.

Truly taking advantage of the Zacks Rank requires the understanding of how it works.  The free special report; “Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions” is available to provide this insightful background. Download a free copy now to prosper in the years to come at http://at.zacks.com/?id=93

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 (2.8% versus +9.7%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

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

Zacks “Profit from the Pros” e-mail newsletter offers continuous coverage of Zacks Rank Buy stocks and highlights those stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=94

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. As a PhD from MIT 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=95

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

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

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

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.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com

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

Zacks Recent Buy Picks

Four free stock picks are being made available today on Zacks.com. The industry’s leading independent research firm highlights one Zacks #1 Rank Strong Buy or a Zacks #2 Rank Buy stock for each of the four main styles of investing: Aggressive Growth, Growth & Income, Momentum, and Value.

The four highlighted picks are: Arrow Electronics Inc (NYSE: ARW), TransAlta Corporation (NYSE: TAC), Manpower, Inc. (NYSE: MAN) and Parker Hannifin (NYSE: PH).

Today, Zacks is promoting its ”Buy” stock recommendations. Four daily picks are offered free. http://at.zacks.com/?id=88

From 1988 through the present – a period that included serious corrections and recessions – the Zacks #1 Rank Stocks have nearly tripled the market with a fully documented average gain of +28% per year.

Here is a summary of today’s selected stocks that are now highly rated by Zacks:

Aggressive Growth – Arrow Electronics Inc (NYSE: ARW)

Arrow Electronics Inc  shot to all-time highs after a recent earnings surprise, yet shares are still a great value.

Zacks Guide to Aggressive Growth Investing (free!) – http://at.zacks.com/?id=4309

Growth & Income – TransAlta Corporation (NYSE: TAC)

TransAlta Corporation carried its momentum into the first quarter of 2011 and delivered a 16% positive earnings surprise. This marked the company’s second consecutive earnings beat.

Zacks Guide to Growth & Income Investing (free!) – http://at.zacks.com/?id=4310

Momentum – Manpower, Inc. (NYSE: MAN)

Manpower, Inc. just reported a great quarter that lifted shares to a new multi-year high. With an average earnings surprise of 39% over the last four quarter and bullish 35% growth projection, this Zacks #1 rank stock is a momentum keeper.

Zacks Guide to Momentum Investing (free!): http://at.zacks.com/?id=4311

Value – Parker Hannifin (NYSE: PH)

Parker Hannifin continues to operate on all cylinders. This Zacks #2 Rank (buy) recently reported record quarterly sales, raised its dividend by 16% and kept its earnings surprise streak alive.

Zacks Guide to Value Investing (free!) –  http://at.zacks.com/?id=4312

How to Regularly Access Top Zacks Rank Picks for Free – http://at.zacks.com/?id=7154

Underlying the four free stock picks is a simple truth that first appeared in a Financial Analysts Journal article published in 1979. Leonard Zacks, a Ph.D. from M.I.T. found that “earnings estimate revisions are the most powerful force impacting stock prices.” Zacks #1 Rank is awarded to a stock when analysts sharply upgrade their estimates of what the company will earn.

Today, Zacks is promoting its stock recommendations by offering four daily picks free to those who register here: http://at.zacks.com/?id=7155

About Zacks

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.

More Free Stock Picks

Each weekday, new Zacks #1 Rank or Zacks #2 Rank stock picks are released on the free email newsletter, Profit from the Pros. Investors are invited to register for their free subscription here: http://at.zacks.com/?id=91

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

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

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

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.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com

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

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

Zacks Releases Todays Bulls and Bears

Zacks Releases Todays Bulls and Bears

Zacks Releases Todays Bulls and Bears-Image via Wikipedia

Zacks Equity Research highlights:  Priceline.com (Nasdaq: PCLN) as the Bull of the Day and Genworth Financial (NYSE: GNW) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Google, Inc. (Nasdaq: GOOG), Microsoft (Nasdaq: MSFT) and Supervalu Inc. (NYSE: SVU).

View Full analysis of all these stocks

Here is a synopsis of all five stocks:
Bull of the Day:

Priceline.com (Nasdaq: PCLN) is one of the leading online travel companies in the world. Priceline’s fourth quarter earnings beat the Zacks Consensus and management expects strong double-digit bookings growth in the next quarter, with international growing much faster than domestic.

The secular growth trend in the online travel space, Priceline’s own business momentum, international growth opportunities, good execution, prudent marketing strategy and strong financial position are likely to drive upside to the shares. While occupancy tax-related litigation remains an overhang, it is likely to have the same impact on all peer companies.

With demand strengthening considerably following the recession, we remain optimistic. We therefore have an Outperform rating on PCLN shares.

Bear of the Day
:

Genworth Financial’s (NYSE: GNW) fourth-quarter operating loss lagged the Zacks Consensus Estimate led by a substantially higher year-over-year loss at the U.S. Mortgage Insurance segment, which was partially offset by better results at Retirement & Protection and at International. We expect an elevated unemployment rate will continue pressuring its mortgage insurance business.

Though the business is showing signs of improvement, the mortgage line is still experiencing losses. Additionally, improvements in its other business lines are expected to be slow, given the economy’s sluggish recovery.

Our six-month target price of $11.00 equates to 10.0x our earnings estimate for 2011. This is consistent with our Underperform recommendation on the shares.

Latest Posts on the Zacks Stock Analysis Blog

Google Misses on Bottom Line

Search engine giant Google, Inc. (Nasdaq: GOOG) reported first quarter 2011 earnings after the closing bell today. Google’s earnings of $7.04 per share missed the Zacks Consensus Estimate by a dime, but revenues for the quarter came in at a healthy $6.54 billion — higher than the Zacks Consensus Estimate of $6.29 billion and even the most recent estimate of $6.38 billion.

Google shares had been up slightly in regular-day trading on Thursday ($2.23 per share, or 0.39%), but in the after-market have slid badly, over 5% and more than $29 per share. Even with net revenue gains of 29% year over year, the miss on the bottom line must be raising red flags to traders.

Over the past month, there has been downward pressure on Google shares, with 5 analysts having lowered estimate revisions for the 1st quarter, and 4 downward revisions for the 2nd quarter and fiscal 2011, as well. The $7.14 per share Zacks Consensus Estimate had come down 5 cents in just the past month, and the company couldn’t even come close to hitting that mark.

Other challenges pertaining to Google’s success in the coming quarters include a changing of the guard from CEO Eric Schmidt to Larry Page, the company’s involvement (or lack thereof) and its burgeoning competition in the Chinese market, and disruptions due to recent catastrophic developments in Japan.

This is now the second earnings miss for Google in the past four quarters. And being that it is the first earnings announcement with Page at the helm, questions may begin to swirl about the company on the management side. But one should not lose sight of the fact that Google has come a very long way in a short amount of time, and will continue to be a stalwart in the industry for a long time to come.

That said, the big question is: will Larry Page be able to find a new goldmine somewhere in its vast expanse of different kinds of business the way Schmidt was able to do with Internet search a few years ago? If so, it will mark another major tier in the relatively brief history of the company. If not, perhaps Google is destined to become another Microsoft (Nasdaq: MSFT), ultimately still successful but unable to capture that elusive “next wave.”

Supervalu Reports Weak 4Q

Supervalu Inc. (NYSE: SVU) one of the largest grocery chains in the United States, reported fourth-quarter 2011 earnings. The quarterly earnings of 44 cents a share outpaced the Zacks Consensus Estimate of 34 cents by 29.4%. However, on a year-over-year basis earnings plunged 29.0%

The company now expects fiscal 2012 GAAP earnings to be in the range of $1.20 to $1.40 per share, which is above the Zacks Consensus Estimate of $1.17.

Revenue and Margins

Supervalu’s total sales dipped 5.9% to $8,673 million in the quarter, compared with $9,205 million in the prior-year period. The reported revenue fell short of the Zacks Consensus Estimate of $8,751 million.

Supervalu’s gross margin was almost flat year-over-year contracting 10 basis points to 23.3% on account of a shift in business segment mix and rise in promotional expenditure.

Segment Details

Net sales at Retail Food (77.0% of the total sales in the quarter) slipped 7.1% to $6,694 million in the quarter compared to $7,206 million in the prior-year quarter. Results followed an identical store sales decline of 5.0% and the adverse impact of retail market exits.

Retail square footage dipped 1.7% year over year in the quarter. However, excluding the impact of market exits and store closures, retail square footage grew marginally by 1.7% in the quarter.

Net sales at Supply Chain Services (23.0% of the total sales in the quarter) increased 1.6% to $1,966 million in the quarter compared with $1,999 million in the prior-year quarter.

Get the full analysis of all these stocks

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 Stock 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

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 InvestmentResearch 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.

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

Subscribe to our YouTube Channel: http://www.youtube.com/user/ZacksInvestmentNews

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.

Media Contact
Zacks Investment Research
http://www.zacks.com
800-767-3771 ext. 9339
support@zacks.com

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

Top Four Stocks to Buy from Zacks

Four free stock picks are being made available today on Zacks.com. The industry’s leading independent research firm highlights one Zacks #1 Rank Strong Buy or a Zacks #2 Rank Buy stock for each of the four main styles of investing: Aggressive Growth, Growth & Income, Momentum, and Value.

The four highlighted picks are: Spreadtrum Communications (Nasdaq: SPDR), Enbridge Inc. (NYSE: ENB), NetEase.com, Inc. (Nasdaq: NTES) and PPG Industries, Inc. (NYSE: PPG)

Today, Zacks is promoting its ”Buy” stock recommendations. Four daily picks are offered free.

Zacks #1 Rank Stocks have nearly tripled the S&P 500 since 1988, producing an average annual return of +26%. Performance has been notable even during volatile and down times. For example, during the last bear market, 2000-2002, the market tumbled -37.6% – but Zacks #1 Rank stocks gained +43.8%.

Here is a summary of today’s selected stocks that are now highly rated by Zacks:

Aggressive Growth – Spreadtrum Communications (Nasdaq: SPDR)

Spreadtrum Communications  analysts are growing more and more bullish of SPRD, but the market has not pushed shares higher. At these valuations it is tough to ignore this Zacks #1 Rank (Strong Buy).

Zacks Guide to Aggressive Growth Investing (free!)

Growth & Income – Enbridge Inc. (NYSE: ENB)

Estimates have been rising for Enbridge Inc. after the company reached a 10-year agreement with shippers for its crude oil mainline system.


Zacks Guide to Growth & Income Investing (free!)

Momentum – NetEase.com, Inc. (Nasdaq: NTES)

NetEase.com, Inc. recently spiked to a new all-time high on the heels of a solid 19% Q4 earnings surprise. With a bullish 13% growth projection and compelling valuation, this Zacks #1 rank stock has gamed its way into momentum.

Zacks Guide to Momentum Investing (free!):

Value –  PPG Industries, Inc. (NYSE: PPG)

Manufacturing is operating on all cylinders. PPG Industries, Inc. recently provided first quarter earnings guidance which was much more bullish than the Zacks Consensus Estimate as global industrial activity continued to recover. This Zacks #2 Rank (buy) has a forward P/E of 14.5.


Zacks Guide to Value Investing (free!)

How to Regularly Access Top Zacks Rank Picks for Free

Underlying the four free stock picks is a simple truth that first appeared in aFinancial Analysts Journal article published in 1979. Leonard Zacks, a Ph.D. in Mathematics from M.I.T. found that “earnings estimate revisions are the most powerful force impacting stock prices.” Zacks #1 Rank is awarded to a stock when analysts sharply upgrade their estimates of what the company will earn.

Today, Zacks is promoting its stock recommendations by offering four daily picks free to those who register here.

About Zacks


Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stockreports issued by 3,000 analysts from 150 brokerage firms. It monitorsmore 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.

More Free Stock Picks

Each weekday, new Zacks #1 Rank or Zacks #2 Rank stock picks are released on the free email newsletter, Profit from the Pros. Investors are invited to register for their free subscription

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

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

YouTube Channel: http://www.youtube.com/user/ZacksInvestmentNews

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

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.

Media Contact
Zacks Investment Research
http://www.zacks.com
800-767-3771 ext. 9339
support@zacks.com

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

Four Top Stocks to Buy Now

Zacks Releases Four Powerful ”Buy” Stocks: Tech Data Corp, The TJX Companies, Clayton Williams Energy and Maidenform Brands

Four free stock picks are being made available today on Zacks.com. The industry’s leading independent research firm highlights one Zacks #1 Rank Strong Buy or a Zacks #2 Rank Buy stock for each of the four main styles of investing: Aggressive Growth, Growth & Income, Momentum, and Value.

The four highlighted picks are: Tech Data Corp (Nasdaq: TECD), The TJX Companies, Inc. (NYSE: TJX), Clayton Williams Energy, Inc. (Nasdaq: CWEI) and Maidenform Brands, Inc. (NYSE: MFB).

Today, Zacks is promoting its ”Buy” stock recommendations. Four daily picks are offered free at http://at.zacks.com/?id=88

Zacks #1 Rank Stocks have nearly tripled the S&P 500 since 1988, producing an average annual return of +26%. Performance has been notable even during volatile and down times. For example, during the last bear market, 2000-2002, the market tumbled -37.6% – but Zacks #1 Rank stocks gained +43.8%.

Here is a summary of today’s selected stocks that are now highly rated by Zacks:

Aggressive Growth – Tech Data Corp (Nasdaq: TECD)

Tech Data Corp has pleased investors with yet another earnings surprise since being featured as a Zacks Rank Buy in late 2010.

Zacks Guide to Aggressive Growth Investing (free!): http://at.zacks.com/?id=4309

Growth & Income – The TJX Companies, Inc. (NYSE: TJX)

As the economy continues to improve, there has been some concern that value-oriented retailers like The TJX Companies, Inc. will lose business as consumers “trade up” to their full priced competitors.

Zacks Guide to Growth & Income Investing (free!): http://at.zacks.com/?id=4310

Momentum – Clayton Williams Energy, Inc. (Nasdaq: CWEI)

Clayton Williams Energy, Inc. continues to trade like a rock star, currently pressuring its multi-year high as crude and nat gas stay bullish. With estimates surging and a compelling valuation, this energy stock is a momentum powerhouse.

Zacks Guide to Momentum Investing (free!): http://at.zacks.com/?id=4311

Value – Maidenform Brands, Inc. (NYSE: MFB)

Consumers can’t get enough shapewear. Maidenform Brands, Inc. recently reported fourth quarter results and saw shapewear sales jump 22%. Even with shares at 5-year highs, MFB still has strong value credentials.

Zacks Guide to Value Investing (free!): http://at.zacks.com/?id=4312

How to Regularly Access Top Zacks Rank Picks for Free: http://at.zacks.com/?id=7154

Underlying the four free stock picks is a simple truth that first appeared in a Financial Analysts Journal article published in 1979. Leonard Zacks, a Ph.D. in Mathematics from M.I.T. found that “earnings estimate revisions are the most powerful force impacting stock prices.” Zacks #1 Rank is awarded to a stock when analysts sharply upgrade their estimates of what the company will earn.

Today, Zacks is promoting its stock recommendations by offering four daily picks free to those who register at http://at.zacks.com/?id=7155

About Zacks

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.

More Free Stock Picks

Each weekday, new Zacks #1 Rank or Zacks #2 Rank stock picks are released on the free email newsletter, Profit from the Pros. Investors are invited to register for their free subscription at http://at.zacks.com/?id=91

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

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

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

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.

Zacks.com

Aggressive Growth Stocks:
Contact: Bill Wilton
Phone: 312-265-9277

or

Growth & Income Stocks:
Contact: Rob Plaza
Phone: 312-265-9442

or

Momentum Stocks:
Contact: Michael Vodicka
Phone: 312-265-9226

or

Value Stocks:
Contact: Tracey Ryniec
Phone: 312-265-9232

Email: pr@zacks.com
Visit: www.zacks.com

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

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

Bulls and Bears Today

Bulls and Bears Today

Bulls and Bears Today-Image via Wikipedia

Zacks Equity Research highlights: Whole Foods Market, Inc. (Nasdaq: WFMI) as the Bull of the Day and StanCorp Financial (NYSE: SFG) as the Bear of the Day. In addition, Zacks Equity Research provides analysis Humana, Inc. (NYSE: HUM), Wal-Mart Stores Inc. (NYSE: WMT) and UnitedHealth Group Inc. (NYSE: UNH).

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:

Whole Foods Market, Inc. (Nasdaq: WFMI), with a strong brand image, offers investors one of the strongest growth profiles in the industry, and the stock is poised to surge as the demand for natural and organic products improves. The company is also revamping its pricing strategy and concentrating more on value offerings, while maintaining healthy margins.

Stringent cost-control measures, effective inventory management and improved store-level performance are driving earnings growth. The company, in the wake of better-than-expected first-quarter 2011 results, now expects sales growth in a range of 10.7% to 12.8% and a bottom-line increase from 23% to 26% in fiscal 2011.

We have a long-term Outperform recommendation on the stock. Our target price of $70.00, 38.7X 2011 EPS, reflects this view.

Bear of the Day:

We are downgrading StanCorp Financial (NYSE: SFG) to Underperform as we expect delinquencies on commercial mortgage loans to remain modestly high in the foreseeable future. Moreover, we suspect organic growth will remain restricted in the near term, given the sluggish economic environment and challenging labor market conditions.

Also, the earnings results lagged the Zacks Consensus Estimate as well as the year-ago results. Higher premiums in the Insurance Services segment, improved earnings in the Asset Management segment and a positive favorable impact of share buybacks were more than offset by lower favorable claims in the Insurance Services segment.

Our six-month target price of $42.00 equates to 8.4x our earnings estimate for 2011. Combined with the annual dividend of $0.86 per share, this target price implies a negative return of about 7.2% over that period. This is consistent with our Underperform recommendation on the shares.

Latest Posts on the Zacks Analyst Blog:

Humana Upped to Outperform

On the back of strong fourth quarter results, we recently upgraded Humana, Inc. (NYSE: HUM) to Outperform.

The company reported a strong fourth quarter on the heels of improved performance in its operations, lower commercial medical cost trends and surplus cash flow generation in 2010, which also resulted in share buybacks.

Results outshone the Zacks Consensus Estimate by 85 cents.

Humana recently completed the acquisition of Concentra Inc. for $790 million in cash on December 22, 2010. Consequently, Humana expects an increase in its consolidated revenue for 2011.

Concentra produces approximately $800 million of revenues annually from 240 workplace health-care facilities and more than 300 medical centers in 42 states. Moreover, the acquisition will provide access to Humana’s medical members in certain geographical areas.

With the closure of the acquisition of Concentra, Humana had raised its earnings per share guidance for 2011, and sees earnings per share in the range of $5.45–$5.65, from the previous outlook of $5.35–$5.55.

Additionally, Humana’s better-than-expected result was attributable to higher average Medicare Advantage membership, which also increased the revenues from premium and administrative services.

At the end of the fourth quarter, Humana’s Medicare Advantage membership jumped nearly 16.8% from the prior-year quarter. However, the increase was partially offset by lower average medical membership in the stand-alone Prescription Drug Plan (PDP) and commercial fully-insured group plans.

Looking forward, we believe that the Medicare Advantage and PDP membership growth estimates for 2011 are expected to increase on strong sales of 2010. Moreover, this also led to the increase in Humana’s 2011 outlook, coupled with the stand-alone Prescription Drug Plan (PDP) offerings during the recently completed 2011 open enrollment period.

Humana now anticipates EPS for the year ending December 31, 2011 (FY11) in the range of $5.70 to $5.90 versus its previous estimate of $5.45 to $5.65. This increase in FY11 EPS guidance primarily reflects better-than-expected sales for the company’s Medicare Advantage and stand-alone PDP offerings during the recently completed 2011 open enrollment period as well as an increase in expected Commercial Segment earnings.

Further, with the launch of a Medicare Part D PDP in collaboration with Wal-Mart Stores Inc. (NYSE: WMT) on October 1, 2010, Humana will now be able to provide Medicare beneficiaries including seniors and disabled citizens to save more than $450 on average in 2011 on premiums, prescription medication co-payments and cost-shares than the drug plans in 2010.

Apart from this, Humana has surplus cash equivalents and investment securities, which have grown drastically by 18% year over year in 2007 and 26% in both 2008 and 2009, although growth moderated at 10.0% in 2010. The company has utilized its excess cash to repurchase shares or for other corporate purposes.

During 2010, Humana repurchased shares worth $100 million, leaving approximately $150 million that can be repurchased by the end of 2011. Going ahead, the strong cash position and capital leverage should help Humana to add to shareholders’ value and confidence in the stock.

Recently, the U.S. Department of Defense (DoD) has awarded its Tricare contract to Humana to administer health benefits to soldiers and their families in the 10-state South region. However, it was initially awarded to a division of Minnesota-based UnitedHealth Group Inc. (NYSE: UNH), but after continuous protests by Humana, DoD reviewed their decision and awarded the $23.5 billion 5-year contract to Humana on February 25, 2010.

As a result of winning the contract, management further upgraded its earnings guidance for 2011 to reflect the extinguishment of expenses of approximately $0.25 per share, which would have been otherwise incurred for the loss of contract in early 2012. Humana’s 2011 earnings guidance was further raised to $5.95 to $6.15 per share, from previous estimates of $5.70 to $5.90 per share.

The quantitative Zacks #1 Rank (short term Strong Buy rating) on the stock indicates strong upward pressure on the shares over the near term.

Headquartered in Louisville, Kentucky, Humana Inc. is one of the largest health care plan providers in the United States. Humana provides health insurance benefits under Health Maintenance Organization (HMO), Private Fee-For-Service (PFFS) and Preferred Provider Organization (PPO) plans. The company also provides other benefits with specialty products including dental, vision and other supplementary benefits.

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

SOURCE Zacks Investment Research, Inc.

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

Zacks “Profit from the Pros” e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=4988.

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.

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

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

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

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

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
Phone: 312-265-9211
Email: pr@zacks.com
Visit: www.Zacks.com

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.

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

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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

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:
Zacks Investment Research
312-630-9880
http://www.zacks.com

CONTACT: Zacks Investment Research, +1-312-630-9880

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

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