Saturday,
January 20, 2007
Volume
8, Issue 2
In This Issue:
1)
Current Market Metrics - Mutual Fund Flows
2)
Recent Blog Research Features
3)
Feature Stock #1 -
Benchmark Electronics (BHE)
4) Feature Stock #2 -
W.R. Berkley Corporation (BER)
5) Viewing the Market
A)
Successful Investing in 2007
B)
Remain
Defensively Cautious
6) Additional Stocks - Worth a Further Look
A)
Addvantage Technologies (AEY)
B)
Total System Services,
Inc. (TSS)
7)
About VitalStocks.com
8) DISCLAIMER: Use of this newsletter signifies your acceptance of this disclaimer.
RSS Feed available: Fresh content each weekday http://feeds.feedburner.com/VitalstocksInvestingNewsletterDigest
This issue sponsored by...
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1) Current Market Metrics:
Inflows into U.S. Equity Mutual
Funds Post Have Resumed -- Averaging $170 Million Daily since October 3 --
Compared with Outflows From May through Mid-September.
Santa Rosa, CA – October 16, 2006 –
TrimTabs Investment Research reports that individual investors have been
cautiously stepping back into the U.S. stock market following the Dow Jones
Industrial Average’s string of record closing highs. From Tuesday, October 3
through Wednesday, October 11, U.S. equity mutual funds received $1.2
billion in fresh cash, an average daily inflow of $170 million.
Source:
http://www.trimtabs.com/press/press_releases/2006-10-16.html
Independent Data on Fund Flows
Data As Of:
17 Jan 2007
-
Including ETF activity, Equity funds
report net cash inflows totaling $3.312 billion in the week ended 1/17/07
with Domestic funds reporting net inflows of $2.254 billion and Non-domestic
funds reporting net inflows of $1.057 billion;
-
Exchange Traded (Equity) funds report net inflows of $1.364 billion with the
largest flows:
* -$1.56 Bil from the SPDR Tr Series I fund;
* $900 Mil to the iShares Russell 2000 Index fund;
* $817 Mil to the DIAMONDS fund;
Source (Much more information available): http://www.amgdata.com/
==============================================
Visit our blog and share an article with a friend.
2) Recent Research Articles - Actionable investment research and commentary, unedited, straight from the pros.
2A)
(BSC)
- Bear Stearns Inc - topped the consensus earnings estimate for 16 straight
quarters, including double-digit percentage surprises in 12 of them:
http://vitalstocks.com/blog/2007/01/bsc-bear-stearns-inc-topped-consensus.html
2B)
(UBS) - UBS AG - estimates for both this year and next are up over the past
60 days:
http://vitalstocks.com/blog/2007/01/ubs-ubs-ag-estimates-for-both-this-year.html
2C)
(GTIV) - Gentiva Health Services, Inc - positioned to benefit from growth of
the home healthcare industry:
http://vitalstocks.com/blog/2007/01/gtiv-gentiva-health-services-inc.html
2D)
(EL) - The Estee Lauder Companies, Inc - company crushed the consensus
estimate by 42.1%:
http://vitalstocks.com/blog/2007/01/el-estee-lauder-companies-inc-company.html
2E)
(PROS) - ProCentury Corp - PEG ratio currently sits at 0.79:
http://vitalstocks.com/blog/2007/01/pros-procentury-corp-peg-ratio.html
==============================================
3) Feature Stock #1:
Benchmark Electronics (BHE)
Gregory Spear, editor of The Spear Report
Professional Edition newsletter, says the Nasdaq should outperform the Dow
and S&P 500 by 2:1 over the next 4-6 weeks. Find out what this featured
expert has to say about the Nasdaq breaking out to a new 52-week high and
read Spear’s analysis of crude oil trading. Afterward, learn about Spear’s
Buy List.
COMMENTARY from January 12
The Nasdaq broke out to new 52-week highs on Thursday, as semiconductors and
other tech-related names take the lead. As Gregory Spear and his team
mentioned before, the rally in tech can be partially explained by a rotation
of fast money out of energy. Crude oil prices plunged to their lowest levels
in 18 months yesterday, with contracts for February delivery closing at
$51.88 on the New York Mercantile Exchange, 33% below the July ’06 high.
With respect to the dramatic decline on crude oil, Spear and his team remind
subscribers that commodity futures trading is a volatile business due to the
supply inelasticity of the underlying asset. The exaggerated price movement
of such highly leveraged contracts can produce a great deal of emotion in
traders, which further reinforces extreme price movements. You can hear this
emotion in the open outcry trading pits of Chicago and New York daily on
CNBC. Moreover, there is a noted tendency among these frenetic traders to
pile on to a position when they perceive an advantage, in a manner
resembling participants and fans of the World Wrestling Federation. In other
words, this plunge may not have much long-term significance.
Crude oil trading in the high $40’s is not widely expected, but Spear and
his team’s analysis of the chart says a brief foray under $50 is a real
possibility given the momentum of the current decline. Such an extreme move
would present TSR Pro subscribers with an historic buying opportunity in the
leading Consensus integrated oils that Spear and his team have highlighted
over the last six months. Moreover, certain oil service companies such as
the deep water drilling and subsea outfits are insulated from crude oil
price fluctuations due to the preponderance of long-term contracts they
enjoy.
Meanwhile, the Nasdaq 100 is leading this market higher, gaining 2.3% in the
last week compared to just .3% for the S&P 500. Spear and his team’s initial
target for the Dow is 13,000 and for the Nasdaq Composite it is 2650. The
Nasdaq should outperform the Dow and S&P 500 by 2:1 over the next 4-6 weeks.
Listening to the Buy List
The Buy List is Spear and his team’s mechanical trading system based on a
proprietary "value-on-the-move" algorithm that looks for value-laden
companies that are currently outperforming the market. This list is
rebalanced weekly and, as a portfolio, it is always 100% invested. The Buy
List scored a 3.4% gain this past week with its sole position, Avnet (AVT),
a global supplier of electronic parts that Spear and his team profiled in
mid-November. This week, the Buy List adds two additional names, Flextronics
(FLEX) and Benchmark Electronics (BHE). This means the Buy List is finding
its preferred combination of value and momentum in the tech sector… and the
tech sector alone.
This article highlights the commentary of Gregory Spear for the Zacks.com
audience. Gregory Spear provides insightful analysis, market commentary, and
favorite recommendations on a timely basis in "The Spear Report Professional
Edition" newsletter. Try it free for 30 days and see if you can improve your
investment performance. Learn more about "The Spear Report Professional
Edition" and 30-Day Free Trial. And get immediate access to current issues
and special reports.
Click here now.
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advice, and insight from those rare few experts who consistently beat the
market year in, year out.
VitalStocks.com Research Summary:
Data as of:
19 Jan
Price / Cash Flow Ratio is
46.3% of the Industry Average.
Forward Price to Earnings Growth (PEG): 0.40
Debt / Equity Ratio is
0.0% of the Industry Average.
Net Profit Margin is
165.4% of the Industry Average.
Return on Equity is
188.3% of the Industry Average.
Current P/E Ratio is
54.4% of the Industry Average.
5-Year Avg. Pre-Tax Profit Margin:
3.1%
Price/Sales Ratio is
115.4% of the Industry Average.
Income Per Employee is
248.3% of the Industry Average.
MSN Money Price Target:
http://moneycentral.msn.com/investor/research/wizards/srwtarget.asp?Symbol=bhe
==============================================
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==============================================
4) Feature Stock #2 –
W.R. Berkley Corporation (BER)
W.R. Berkley Corporation (BER) reported solid results for the third quarter
and first nine months of the year in late October. On Nov 3, the Board of
Directors increased the company's share repurchase authorization by 20
million shares and declared a quarterly cash dividend of four cents per
share. BER’s return on equity nearly doubles that of the industry
average—25% compared to 13%.
Full Analysis
W.R. Berkley Corporation is an insurance holding company that is among the
largest commercial lines writers in the United States and operates in five
segments of the property casualty insurance business: specialty insurance,
regional property casualty insurance, alternative markets, reinsurance and
international.
On Oct 25, BER reported third-quarter earnings per share of 86 cents per
share. The result beat the Street’s estimate by three cents and soared past
earnings in the prior-year period by 45.8%. Revenues increased 7.9% to $1.37
billion from $1.27 billion, while net premiums written rose 7.1% to $1.21
billion from $1.13 billion. BER is scheduled to release its fourth-quarter
results on Feb 12.
Chairman and CEO William R. Berkley stated, “Our company has continued to
deliver excellent returns while growing in an increasingly competitive
environment. Our expansion into new lines of business and the growth of our
existing activities have enabled us to maintain a growth rate in excess of
the industry.”
For the first nine months of the year, profits ballooned 32.9% to $501.5
million, compared to $377.5 million for the first nine months of last year.
Revenues climbed 10.4% to $4.03 billion from $3.65 billion, while net
premiums written experienced a 7.5% increase to $3.71 billion from $3.45
billion.
The company’s combined ratio for the quarter, a measure of profitability for
insurance companies, was 88.5% compared to 92.1% for the same period in
2005. For the first nine months of the year, the combined ratio was 88.6%
compared to 90.2% for the same period in 2005. A ratio less than 100%
indicates that the company is turning an underwriting profit, while a ratio
greater than 100% indicates one that is paying out more money in claims
versus receiving via premiums.
On Nov 3, the Board of Directors increased the company's share repurchase
authorization by 20 million shares. At the time of the announcement, BER had
approximately 2.6 million shares remaining that it could buy back under
previously approved authorizations. The Board also declared a regular
quarterly cash dividend of four cents per common share of stock. BER has a
current dividend yield of 0.46% and a five-year average dividend yield of
0.70%.
The company was named by Forbes to its Platinum 400 list, which identifies
the best of the biggest publicly traded companies in America. Companies are
selected after a thorough review of financial metrics, Wall Street
forecasts, corporate governance ratings and other public information.
BER’s return on equity, a common measure of profitability, nearly doubles
that of the industry average—25% compared to 13%.
BER is a Zacks #2 Rank (Buy) stock. Zacks #2 Rank stocks have generated an
average annual return of 21.6% since 1988. Because the Zacks Rank has a
market cap bias, Growth & Income investors may find a greater number of
large-cap stocks by considering both Zacks #1 Rank (Strong Buy) and Zacks #2
Rank (Buy) stocks in their selection criteria.
Content Courtesy: Zacks Investment Research http://www.zacks.com/
#1 Ranked Stocks Highlight Archive
To truly take advantage of the Zacks Rank, you need to first understand how
it works. That is why we created the free special report: Zacks Rank Guide:
Harnessing the Power of Earnings Estimate Revisions.
http://web1.zacks.com/zrank.pdf
VitalStocks.com Research Summary:
Data as of:
19 Jan
Price / Cash Flow Ratio is
51.6% of the Industry Average.
Forward Price to Earnings Growth (PEG): 0.38
Debt / Equity Ratio is
81.1% of the Industry Average.
Net Profit Margin is
118.5% of the Industry Average.
Return on Equity is
221.6% of the Industry Average.
Current P/E Ratio is
77.8% of the Industry Average.
5-Year Avg. Pre-Tax Profit Margin: 123.9% of the Industry Average
Price/Sales Ratio is
73.4% of the Industry Average.
Income Per Employee is
93.8% of the Industry Average.
MSN Money Price Target:
http://moneycentral.msn.com/investor/research/wizards/srwtarget.asp?Symbol=ber
==============================================
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White Paper.
Scientists estimate the US has yet to tap significant oil and gas reserves.
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Now.
http://findinvestinfo.com/vstocks/nl/189
==============================================
5) Viewing the Market:
5A)
Successful Investing in 2007
Charles Carlson, editor of the DRIP Investor newsletter, says a number
of factors may be in the market’s favor both seasonally and
fundamentally as we enter 2007. Read this featured expert’s commentary
to find out why he is with the bulls. Also, discover what he has to say
about factors that could cause a market swoon. Afterward, check out
Carlson’s investment ideas for 2007.
Commentary from January 1
If 2007 turns out to be a carbon copy of 2006, Charles Carlson doesn’t
think too many investors will complain.
Will 2007 see more of the same?
Perhaps. A number of factors are in the market’s favor at this time,
both seasonally and fundamentally:
*The year following mid-term elections tends to be very strong for
stocks. Admittedly, Carlson gets a little uncomfortable using historical
patterns to support market outlooks. Still, an investor shouldn’t ignore
the tendency for stocks to move higher following mid-term elections.
*The three main engines of stock-market performance — corporate profits,
interest rates, and inflation — remain net positive for stock prices.
While market pundits love to point to lots of stuff to justify stock
prices, what really matters to the market are these three drivers.
What’s the future of corporate profits? In Carlson’s opinion, pretty
solid. Corporate America continues to drive productivity gains. And
global economic growth should be enough to support higher profits. Also,
companies have become very adept at under-promising and over-delivering
when it comes to corporate profits, so Carlson believes the trend of
positive earnings surprises will continue. Interest rates look like they
will continue to support higher stock prices. Carlson knows lots of
people expect the Federal Reserve Board to cut interest rates in 2007.
He is not convinced that will happen. However, while the Fed may not cut
rates, Carlson doesn’t expect the Fed to raise rates. Thus, interest
rates should be benign, and that’s good news for stocks. Finally,
inflation does not appear to be a major threat to stock prices.
*The world remains awash in cash, and that cash has to go somewhere. The
huge amount of takeover activity, the big dividend increases being
passed by corporate boards, and the huge amount of stock buyback
activity is all a reflection of the cash-heavy balance sheets of
corporate America as well as the huge war chests being held by private
equity firms and hedge funds. And that cash in motion tends to be
bullish for stocks.
*The primary trend of the market continues to be bullish under the Dow
Theory. The last major signal under the Dow Theory was a bull market
signal when both the Dow Industrials and Transports went to new highs
last May.
Of course, it is never hard to find things wrong with the market, and
Carlson’s bullish thesis could be short-circuited by a number of items.
Perhaps the most threatening development that bears watching is the
inability of the Dow Transports to move to all-time highs above 4998.
Carlson cannot imagine another big run in stock prices in 2007 without
the Transports getting in gear. What would it take for the Dow Theory to
turn bearish? Failure of the Transports to close above 4998.95, and a
decline in the Dow Industrials below 10,706.14, would constitute a bear
market. Now Carlson realizes that would require a decline of about 13%
in the Dow Jones Industrial. However, don’t forget the Dow Industrials
declined roughly 8% from May 10 to June 13 of 2006, so sharp downdrafts
in the market do happen.
Besides the problem with the Transports, what else could cause a market
swoon? The factors that usually cause the largest declines are those
that nobody sees coming. Still, if Carlson had to guess, some potential
threats remain in energy prices (although he is not too concerned about
this one), a global economic slowdown (the chances of this increase the
longer the Dow Transports — a leading economic barometer — fail to go to
new highs), a terrorist strike (Carlson doesn’t even want to think about
this one), or politicians fiddling with the tax code, especially as it
relates to capital gains and dividends. One indicator showing that the
market could pull back in the near term is the Intermediate Potential
Risk indicator, which is now in “higher risk” territory.
Of course, predictions about the market are of dubious value for
investors. For starters, most predictions are usually wrong (although
Carlson has had a decent track record in recent years). But perhaps even
more importantly, it is a market of stocks, and investors can make money
regardless of what happens to the major market indexes if they own the
right stocks.
To that end, here are some investment ideas for 2007.
Two Dow stocks that bear watching in 2007 are sleeping giants that
appear to be awakening. Indeed, General Electric (GE) and International
Business Machines (IBM) haven’t exactly been money machines for their
shareholders over the last several years. GE still trades below its 2002
high of nearly $42 per share, not to mention the stock’s 2000 high of
more than $60. IBM still trades below its 2004 high of more than $100
and its 1999 high of more than $139 per share. However, recent price
action has given investors something to cheer. GE recently went to its
highest level in four years, while IBM has moved to a new 52-week high.
Such breakouts after long periods of relative slumber are usually
significant for stocks. Carlson thinks both stocks will outpace the
overall market over the next year. Investors who like large-cap stocks
and have been waiting for these blue chips to behave like, well, blue
chips should jump on board at these prices.
GE and IBM offer direct-purchase plans. GE’s plan permits initial
purchases with a minimum $250. Subsequent investments may be as little
as $10. There is a one-time enrollment fee of $7.50. Purchasing costs
are $3 ($1 if stock is purchased with automatic monthly debit of a bank
account). Selling fees are $10 plus $0.15 per share. The plan
administrator is Bank of New York.
IBM’s direct-purchase plan has a minimum initial investment of $500. The
firm will waive the minimum if an investor agrees to automatic monthly
investment via electronic debit of at least $50. There is a one-time
enrollment fee of $15. Purchase fees are $5 ($1 if made with automatic
monthly debit). Selling fees are $15 plus $0.10 per share. The plan
administrator is Computershare/EquiServe.
Courtesy: http://zacks.com
==============================================
Actionable, Professional Research updated daily
Our daily professional research content blog is up and running. We post new research daily. See it here: http://www.vitalstocks.com/blog/index.html
==============================================
5B)
Remain Defensively Cautious
Dennis
Slothower, editor of the On the Money-E newsletter, provides his technical
analysis of recent market trends. Find out what this featured expert has to
say about the OTC indexes and crude oil. Also, learn Slothower’s outlook and
discover why this mutual fund guru is not chasing this market.
Market Commentary: from January 17
The OTC indexes ran into trouble today as investors took profits in this
sector. Yesterday, the daily stochastics for the OTC Composite reached %K 98
and %D 92, so some sort of a retracement in this sector isn’t too
surprising.
The OTC has been the strongest sector this year, given a nearly $10 drop in
crude oil prices. But oil seems to have found technical support at the $50
range and rebounded today, up $1.03 to close at $52.24 a barrel.
The oil rally came as traders decided to close short positions, convinced
that prices may have bottomed out around the psychologically significant $50
level. One day doesn’t make a trend though.
However, this could turn out to be an important bottom for crude oil. The
Fed released the Fed Beige Report today, which showed that the economy is
still expanding at a modest pace, with labor still looking strong. This
could have also helped convince traders to rotate some monies towards the
energy sector again, with investors hoping that the economy is still on
track for modest growth.
This is an important ratio we want to watch closely. The dominant market
theory is based on the comparison of the NYSE index verses the OTC
Composite. Energy stocks tend to have an overweight bias in the NYSE index.
Consequently, a rally in oil stocks tends to compete with the
growth-oriented sectors.
Since the nearly $10 drop in oil prices the OTC indexes have reclaimed
market leadership. But for a favorable equity market it has to maintain that
leadership going forward. The McClellan Summation Volume OTC index has
almost turned positive again, though a rebound in oil could unravel the
short term progress over the last week or so.
This is a key indicator to gauge market leadership. If the OTC can maintain
market leadership it would support the idea of another intermediate-term
rally for the general market.
If OTC leadership fails here, as the Philadelphia Semiconductor Index (SOX)
is doing now (which closed below its 50-day moving average today), it would
support the hypothesis that a major market top is at hand.
Dennis Slothower continues to see mixed fundamental and technical signals,
which make it tricky to know if this is a pause for another rally or a
topping pattern prior to a correction.
For the last four days, the Fidelity Select Family Stochastic Oscillator has
curled to a neutral position, at %K 95 and %D 95, with the Fidelity sector
family averages’ MACD indicator still turning downward, though.
This is a pretty good reflection as to what the sectors are doing
collectively. A drop in the MACD of this family suggests that the average
sector is losing ground, which would in turn cause the stochastics to go
negative. This is a big reason why Slothower does not want to chase this
market. Should the equity market fail here in extreme overbought conditions
on the longer term stochastics it could mean a rapid decline.
The monthly stochastic of the Dow 30 are at %K 97 and %D 90, so you can
imagine what they will be in February. The S&P 500 is at %K 91 and %D 74, so
the market is quite extended here and warrants caution.
Courtesy:
http://Zacks.com
==============================================
What do we pick?
VitalStocks newsletter presents the two best ideas from the commentary of the week. Here is the secret: We take all those ideas and compare each stock to various industry averages.
Professionals pay thousands of dollars per year for access to this information. Our publishers feel some investors need to take a test drive before purchasing the investing newsletters of their choice.
Submit all comments or ideas: webmaster@vitalstocks.com
==============================================
6) Additional Stocks - Worth a Further Look
6A)
Addvantage Technologies (AEY)
See
AEY comments at article end
Gregory Spear, editor of The Spear Report newsletter, provides
“value-on-the-move” picks for 2007 as well as three large-caps that fall
under the growth category. Find out which companies this featured expert
likes for the new year. Then take a look at a few samples of other
investment recommendations.
Executive Summary from January 5
2006 was a good year for the market, but that’s history. What about 2007?
Gregory Spear and his team identify five opportunities within the two major
investing styles, Value and Growth.
Their Value-on-the-Move Picks for 2007 are investment brokerage Goldman
Sachs (GS) and China’s smaller integrated oil company Cnooc (CEO). Both
stand to benefit from continuing global development trends that Spear and
his team expect to last into 2008.
In the growth category Spear and his team favor three large-caps: Apple (AAPL),
Cisco (CSCO) and Google (GOOG). These three companies are going to benefit
from new trends in media and information technology.
Stocks Recommended Now by the Best Performing Sources over the last 1-Year
include…
Mcdermott International (MDR) is one of the leading worldwide energy
services companies. The company's subsidiaries manufacture steam-generating
equipment, environmental equipment, and products for the U.S. government.
They also provide engineering and construction services for industrial,
utility, and hydrocarbon processing facilities, and to the offshore oil and
natural gas industry.
Commercial Metals (CMC) has three segments - manufacturing, recycling, and
marketing and trading. Activities are primarily concerned with metals
related activities. The manufacturing segment is the dominant and most
rapidly expanding segment in terms of assets employed, capital expenditures,
operating profit and number of employees. The recycling segment is engaged
in processing secondary, or scrap, metals for further recycling into new
metal products. The marketing and trading segment buys and sells primary and
secondary metals, and fabricated metals.
Addvantage Technologies (AEY) sells new, used and refurbished cable TV
equipment in addition to repairing equipment for cable companies within the
United States and in various international markets. It maintains one of the
largest inventories in the industry with new, surplus and refurbished
equipment, accessories and construction hardware. Customers include cable
television system operators, hotels, motels, hospitals, apartments and a
myriad of other companies involved in the distribution of television
signals.
This article highlights the commentary of Gregory R. Spear for the Zacks.com
audience. Gregory R. Spear provides insightful analysis, market commentary,
and favorite recommendations on a timely basis in "The Spear Report"
newsletter. Try it free for 30 days and see if you can improve your
investment performance. Learn more about "The Spear Report" and 30-Day Free
Trial. And get immediate access to current issues and special reports. Click
here now. http://www.zacks.com/experts/search/newsletter_homepage.php?newsletter_id=39
Here’s How You Can Profit from the Pros http://register.zacks.com/step1.php?ALERT=MYZMOD&ADID=FEXPERT
Find out what other leading experts are saying about the market. And what
stocks they are recommending. For free. Just sign up for our free email
newsletter, Profit from the Pros, where we’ll give you the commentary,
advice, and insight from those rare few experts who consistently beat the
market year in, year out.
==============================================
6B)
Total System Services, Inc. (TSS)
Total System
Services, Inc. (TSS) is a Zacks #1 Rank stock that has either matched or
beat the consensus earnings estimate for the past 16 quarters. The company
recently reported impressive results for both the fourth quarter and the
full year. TSS has a current dividend yield of 0.94% and a five-year average
dividend yield of 0.68%. The company’s return on equity nearly doubles that
of the industry average—20% compared to 11%.
Full Analysis
Total System Services, Inc. provides electronic payment processing and
related services to financial and non-financial institutions throughout the
United States, Canada, Mexico, Honduras, Puerto Rico and Europe.
TSS topped analysts’ earnings expectations over the past three quarters by
an average margin of 31.5%. The company has succeeded in either meeting or
beating the consensus earnings estimate for the past 16 quarters. Earnings
per share grew 16.0% over the past five years.
On Jan 16, TSS obliterated the Street’s fourth-quarter earnings estimate of
24 cents by 83.3% when it reported profits of 44 cents per share. Compared
to earnings of 25 cents in the fourth quarter of last year, the result
ballooned 76.0%. Revenues increased nearly 19.8% to $503.9 million from
$420.7 million in the prior-year period.
For the entire year, profits came in at $249.2 million, versus $194.5
million last year. Revenues jumped 11.9% to $1.79 billion from $1.60 billion
in 2005. The company increased revenues and grew profits for the past 10
years.
Chairman and CEO Philip W. Tomlinson stated, “We exceeded our goals for 2006
with another record year and we are pleased to announce an improvement in
our guidance for 2007, which is a direct result of the TSYS team approach of
focusing on our growth strategy while streamlining costs.”
TSS now expects fiscal 2007 profits to decline only 3% to 5% year-over-year.
Previously, the company anticipated a sharper drop of between 7% and 9%. The
guidance includes a one-time contract-termination fee of about $68.9 million
and the acceleration of amortization of contract acquisition costs of around
$6 million. Taking these items out of the equation, profits should grow
between 14% and 17%, versus the company’s previous forecast for 8% to 10%
growth.
Analysts responded to the company’s bullish guidance by raising their
earnings estimates. The consensus estimate for this year jumped two cents to
$1.18 over the past week. Profit forecasts for next year rose three cents to
$1.32 over the same period of time. Earnings per share are projected to grow
13.0% over the next 3-5 years.
On Nov 21, the Board of Directors declared a quarterly cash dividend of
seven cents per share. The company has a current dividend yield of 0.94% and
a five-year average dividend yield of 0.68%. TSS’s return on equity nearly
doubles that of the industry average -- 20% compared to 11%.
Content Courtesy: Zacks Investment Research
#1 Ranked Stocks Highlight Archive
To truly take advantage of the Zacks Rank, you need to first understand how
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