Stock Picks including Free Penny, Rocket, Day Trading, Momentum and Best Hot Top Ten Expert Stock Market Investment Pick

Saturday, April 28, 2007
Volume 8, Issue 9

In This Issue:

1) Current Market Metrics - Mutual Fund Flows
2) Recent Blog Research Features
3) Feature Stock #1 - United States Steel Corporation (X)
4) Feature Stock #2 - Petrobras (PBR)
5) Viewing the Market
    A) GDP - Anemic, But Inflationary
    B) Existing Home Sales
6) Additional Stocks - Worth a Further Look
    A) American Physicians Capital, Inc. (ACAP)
    B) MAF Bancorp (MAFB)
7) About VitalStocks.com
8) DISCLAIMER: Use of this newsletter signifies your acceptance of this disclaimer.

RSS Feed available: Fresh content each weekday Click for Feed

This issue sponsored by...
==============================================

Choosing the Right 401K Plan for Your Business

"Get a complimentary overview on how to evaluate the most important factors in choosing the 401k plan that’s right for your business. Learn the necessary steps you need to take as a business owner to implement a 401k plan and receive complimentary quotes from pre-qualified 401k providers. Click to qualify

http://findinvestinfo.com/vstocks/nl/300

=============================================

1) Current Market Metrics:

Stock Mutual Funds Saw $3.38 Billion Inflow Thursday-Wed - TrimTabs

NEW YORK -(Dow Jones)- Stock mutual funds saw an inflow of $3.38 billion during the week ended Wednesday, compared with an inflow of $4.27 billion during the previous week, according to TrimTabs Investment Research estimates.

Full Source: http://www.nasdaq.com

Patience paid off for investors

NEW YORK — Mutual fund investors who held their ground after the stock market's late February pullback didn't have to wait long to see the wisdom of their decision.

...Inflows at six large mutual fund families rose 14 percent to $15.9 billion in March compared with a gain of $13.9 billion in February, according to fund tracker TrimTabs.

Full Source: http://www.mysanantonio.com

Independent Data on Fund Flows
Data As Of: 25 April 2007

- Including ETF activity, Equity funds report net cash inflows totaling $6.078 billion in the week ended 4/25/07 with Domestic funds reporting net inflows of $3.794 billion and Non-domestic funds reporting net inflows of $2.284 billion;

- Money Market funds report net cash outflows totaling -$1.402 billion;

Full 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) CBEY - Cbeyond, Inc - reported fourth-quarter earnings that blew away forecasts by 300%:
http://vitalstocks.com/blog/2007/04/cbey-cbeyond-inc-reported-fourth.html

2B) GWW - W.W. Grainger, Inc - topped or matched the consensus estimate for 14 consecutive quarters:
http://vitalstocks.com/blog/2007/04/gww-ww-grainger-inc-topped-or-matched.html

2C) MA - MasterCard Inc - Over the past three quarters, MA’s average margin of surprise was 55.0%:
http://vitalstocks.com/blog/2007/04/ma-mastercard-inc-over-past-three.html

2D) QCOM - QUALCOMM Inc - company has now topped analysts’ expectations in 10 out of the last 12 quarters:
http://vitalstocks.com/blog/2007/04/qcom-qualcomm-inc-company-has-now.html

2E) ICFI - ICF International, Inc - Consensus estimates for this quarter and next are up 76.0% and 66.7%:
http://vitalstocks.com/blog/2007/03/icfi-icf-international-inc-blew-away.html

==============================================

3) Feature Stock #1: United States Steel Corporation (X)

United States Steel Corporation (X) exceeded analysts’ earnings expectations in four straight quarters by an average margin of 20.8%. Consensus earnings estimates for both this year and next are up over the past 30 days. On Mar 29, X announced that it will acquire Lone Star Technologies, Inc., making it North America's largest producer of tubular steel. X has a price-to-book ratio of 2.9 and a current dividend yield of 0.76%.

Full Analysis

United States Steel Corporation manufactures a wide variety of steel sheet, tubular and tin products; coke, and taconite pellets; and has a worldwide annual raw steel capability of 26.8 million net tons.

X topped the Street’s earnings estimate in four straight quarters by an average margin of 20.8%. Furthermore, the company met or beat the consensus estimate in 14 out of the past 16 quarters. During this period of time, X surprised to the upside by a double-digit percentage on nine occasions.

On Jan 29, X reported fourth-quarter profits of $2.44 per share. With analysts calling for $2.27, the company surpassed expectations by 7.5%. Compared to earnings of $1.14 in the prior-year period, the result equated to a 114.0% year-over-year improvement. Revenues jumped 8.7% to $3.77 billion from $3.47 billion in the fourth quarter of 2005.

For the entire year, profits came in at $1.37 billion, or $11.18 per share, compared to $910 million, or $7.00 per share, in 2005. Revenues rose to $15.72 billion from $14.04 billion. X is scheduled to report its first-quarter results on Apr 24.

Chairman and CEO John P. Surma stated, "Our performance in 2006 resulted in another outstanding year, with record sales, operating income and net earnings. All in all, 2006 will go down as one of the best years in our long history."

While the consensus earnings estimate has held steady for this quarter over the past 30 days, profit forecasts for next quarter are up 13 cents. Estimates for this year and next experienced 22-cent and 44-cent jumps, respectively, over the same period of time. Four analysts upped their estimates for this year while six followed suit for next year. Earnings per share are projected to grow 10% over the next 3-5 years, with the industry expected to grow by 8%.

On Mar 29, X announced that it will acquire Lone Star Technologies, Inc., a manufacturer of welded oilfield tubular goods, for $67.50 per share in cash. The deal is expected to close in the second or third quarter of 2007. The transaction will make X North America's largest producer of tubular steel.

X is currently trading at a valuation of 11.3x current fiscal-year estimated earnings and at 12.3x next fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 15.7x current fiscal-year estimated earnings and at 14.3x next fiscal-year estimated earnings. The company has a price-to-book ratio of 2.9 and a current dividend yield of 0.76%. It has a return on equity of 32% versus 19% for the industry average.

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 Compiled: 26 Apr

Price / Cash Flow Ratio is 71.3% of the Industry Average.

Forward Price to Earnings Growth (PEG): 3.73

Debt / Equity Ratio is 46.7% of the Industry Average.

Net Profit Margin is 145.7% of the Industry Average.

Return on Equity is 132.8% of the Industry Average.

Current P/E Ratio is 69.7% of the Industry Average.

5-Year Avg. Pre-Tax Profit Margin is 126.5% of the Industry Average.

Price/Sales Ratio is 62.2% of the Industry Average.

Income Per Employee is 123.1% of the Industry Average.

MSN Money Price Target: http://moneycentral.msn.com/investor/research/wizards/srwtarget.asp?Symbol=x

==============================================

4) Feature Stock #2 – Petrobras (PBR)

Note: See PBR Comments below and Vital Stocks' industry ratio comparison

In the latest release of The Spear Report Professional Edition, Gregory Spear says the greater concern is about the slowing economy. For additional comments and some Buy recommendations, we excerpted the following from his newsletter:

Commentary – April 13, 2007:

As there is little hope for a rate cut anytime soon, the greater concern is about the slowing economy. Thursday’s news suggests a sanguine consumer with money to spend and contradicts the key argument for the bears. Meanwhile, gasoline prices are way up, but as this is the second time we have seen $3+ at the pump, the emotional shock value is quite a bit less. In fact, at this point, higher crude prices are a plus for Wall Street.

Crude oil rose 3% on Thursday to close at nearly $64 a barrel. This helped our energy plays and Schlumberger (SLB) in particular. We have gone out on a limb and forecast a $100 price target for SLB this year. The stock is now at $75, holding a steady uptrend. Our forecast is based on a combination of fundamentals and technicals (chart pattern). We find that when the two elements reinforce each other, the price movement can be spectacular. We are also bullish for the long-term on Petrobras (PBR). Brazil’s bourse made a new all-time high this week. The spectacular Buy List performance this past week has enabled it to pull far ahead of all the major indices in terms of year to date performance. This week it adds back Avnet (AVT) and Continental Airlines (CAL). The Buy List is finding its preferred combination of value and momentum in a mix of globally focused energy and technology.

Recommendations:

Schlumberger (SLB) – Schlumberger Limited is a global technology services company consisting of two business segments, Schlumberger Oilfield Services and SchlumbergerSema. Schlumberger Oilfield Services is the leading provider of exploration and production services, solutions and technology to the international petroleum industry. SchlumbergerSema is a leading information technology services company providing a unique combination of domain expertise and global capabilities delivered on a local basis.

Petrobras (PBR) – PETROBRAS-ADR C is an integrated company operating in exploration, production, refining, retailing and transportation of petroleum and its byproducts at home and abroad.

Avnet (AVT) – Avnet Inc. is one of the world's largest industrial distributors of electronic components and computer products. The company is a vital link in the chain that connects suppliers of semiconductors, interconnect products, passive and electromechanical devices to original equipment manufacturers and contract manufacturers that design and build the electronic equipment for end-market use, and to other industrial customers. The company markets, distributes and optimizes the supply-chain and provides design-chain services for the products of the world's leading electronic component suppliers, enterprise computer manufacturers and embedded subsystem providers.

Continental Airlines (CAL) – Continental Airlines, Inc. is one of the largest airlines in the U.S., offering departures daily to domestic and international destinations. With hubs in Newark, Houston, Cleveland and Guam, Continental serves numerous international cities, including extensive service throughout the Americas, Europe and Asia.

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.

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. Just sign up for our 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.

VitalStocks.com Research Summary:
Data Compiled: 26 Apr

Price / Cash Flow Ratio is 52.3% of the Industry Average.

Forward Price to Earnings Growth (PEG): 0.39

Debt / Equity Ratio is 129.7% of the Industry Average.

Net Profit Margin is 574.7% of the Industry Average.

Return on Equity is 144.7% of the Industry Average.

Current P/E Ratio is 65.2% of the Industry Average.

5-Year Avg. Pre-Tax Profit Margin is 124.5% of the Industry Average.

Price/Sales Ratio is 17.4% of the Industry Average.

Income Per Employee is 181.9% of the Industry Average.

MSN Money Price Target: http://moneycentral.msn.com/investor/research/wizards/srwtarget.asp?Symbol=pbr

==============================================

5) Viewing the Market:

5A) GDP - Anemic, But Inflationary

by Dirk van Dijk, CFA

Anemic, lethargic, sluggish, take your pick of adjectives to describe the growth of the U.S. economy in the first quarter. The consensus expectation going into the report was for growth of 1.8% and we came in at 1.3%. I had been expecting a weaker than consensus figure, but this was even weaker than I expected. In the fourth quarter we grew at 2.5%. If this number holds up after the next two rounds of revisions it will be the weakest period of growth since the last recession. In the last six quarters we have had only one which exceeded 3.0% (which is generally seen as the potential growth rate of the economy) and that was due to the bounce back from the hurricanes. Digging deeper into the numbers it is clear that housing continues to be a problem with Residential Investment falling 17.0%, although that is not as rapid a decline as the 19.8% fall in the fourth quarter. For the rest of the year I expect that housing will continue to be a drag on the economy but the rate of decline may continue to slow.

The consumer held up pretty well with real personal consumption expenditures rising 3.8% although that was down from the 4.2% rise in the fourth quarter. Within the consumer sector, spending on durable goods was very strong, up 7.3% versus a rise of 4.4% in the fourth quarter, while spending on non-durable goods saw growth fall to 2.9% from 5.9% in the fourth quarter.

Spending by businesses improved from the very weak showing in the fourth quarter, rising 2.0% versus a decline of 3.1% in the fourth quarter. Not exactly robust, but not imploding either. Both components of business spending put in better performances, with non-residential building rising at a 2.2% annual rate in the first quarter versus a 0.8% rise in the fourth quarter, and spending on equipment and software rising 1.9% versus a decline of 4.8% in the fourth quarter. Lower inventory investment also was a drag on economic growth but not as much of a drag as it was in the fourth quarter.

Government spending was a major contributor to the weak economic growth growing only 0.9% versus a 3.4% rise in the fourth quarter. Federal spending was down 3.0% versus a 4.6% rise last quarter. In the fourth quarter, defense spending ballooned 12.3% while non-defense spending fell sharply by 9.6%. That pattern was reversed in the first quarter with defense spending falling 6.6% while non-defense spending rose 4.7%. Meanwhile, state and local spending rose 3.3% in the first quarter versus 2.7% in the fourth quarter.

Net imports were a significant drag on economic growth which is a bit of a surprise given the gradual improvement in the trade picture we have seen in other measures. Exports fell 1.2% after surging 10.6% in the fourth quarter, while imports rose 2.3% after falling 2.6% in the fourth quarter. If the overall GDP number does get revised upward next month, I would think that the net export picture will be a major factor.

This report will not cause the Fed to move in the direction of easing either since the GDP price deflator came in at 4.0% versus 1.6% in the fourth quarter, the highest reading in several years. There is a name for the combination of sluggish growth and higher inflation: Stagflation. Relative to the seventies it is still a mild case, but a case of it none the less.

Overall this report shows that the economy has a cold, not cancer (it may also have cancer in the form of exploding health care costs etc, but that is a much longer term issue that does not really show up in this report, and it is still a treatable form of cancer…but I digress). The overall growth number may be revised somewhat higher next month, but not enough to change the picture of a very sluggish, but not recessionary, economic environment. Fortunately, growth elsewhere in the world is about the best it has ever been, and the S&P 500 firms derive a large portion of their earnings from abroad. With relative growth much higher abroad, I would expect the dollar to continue to weaken. Look to invest in U.S. firms with large overseas operations or in overseas markets directly.

Courtesy: Zacks Equity Research Analyst Blog

==============================================

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) Existing Home Sales

The National Association of Realtors released the Existing Home Sales data for March this morning. From the data it is clear that the housing market slump is not in its last throes. March is the traditional beginning of the Spring selling season, and thus is far more significant than the reports for January or February the same way that December sales are more significant to Wal-Mart (WMT) than are January or February sales. The data was just plain ugly, with sales dropping 8.4% to a seasonally adjusted annual rate of 6.120 million, from 6.680 million in February. A year ago, existing homes were selling at a 6.900 million annual rate. If one looks at just single family homes (excludes condos and co-ops), sales were down 9.5% for the month and 11.9% for the year.

At the current selling rate, it would take 7.3 months to clear the current inventory of houses on the market, up from 6.8 months in February and 5.6 months a year ago. Inventory months of supply are back up to where they were last Fall, before the winter dip. During 2003 through mid-2005, months of supply were consistently in the 3.8 to 4.3 range. While existing home sales do not have the same direct impact on economic growth that new home sales do, they are far larger than new home sales. They do tend to have an indirect economic impact, since when people move into a “new old” house they tend to redecorate and remodel, buy new furniture, etc. They also pay the realtor and mortgage banking fees, etc.

Existing home sales are recorded at the closing of escrow, not when the deal was made. Thus, the March report reflects activity in late January and early February as much as it does activity in March. Now, the weather was sort of lousy in February in many areas of the country, which could have played a role, but that period was before the worst of the sub-prime implosion. I would also note that if it were really a weather story, then the weakness would be regionally concentrated. It was not, sales were down 10.9% in the Midwest, 9.1% in the West, 8.2% in the Northeast and down 6.2% in the South.

Housing is a train wreck that happens in slow motion. Demand is down (demographics turning less favorable, less financing available) and supply is up (look at the rise in inventories, plus all the new homes that have been built over the last few years). However, people have emotional attachments to their homes and everyone thinks their town is different. Sellers refuse to drop their asking prices and buyers refuse to bid up, and thus it is volume that suffers before prices. The price adjustment to clear the market will take place over a very prolonged period, measured in years -- not weeks or months (in the stock market, by comparison, the adjustment tends to be measured in minutes and hours, days or weeks at the most). Anyone who is looking for a new place to live should consider zero price appreciation for the house over the next five years to be an optimistic scenario. If with that assumption it makes sense to buy rather than rent, go ahead. But very, very few markets in the U.S. would fit that description.

Courtesy: Zacks Equity Research Analyst Blog

==============================================

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) American Physicians Capital, Inc. (ACAP)

American Physicians Capital, Inc. (ACAP) exceeded analysts’ earnings expectations in 13 consecutive quarters. Consensus earnings estimates have risen over the past 60 days for this Zacks #1 Rank stock. ACAP continues to return value to shareholders through stock buybacks. The company has a price-to-book ratio of 1.7 compared to 4.4 for the market.

Full Analysis

American Physicians Capital, Inc., through its subsidiaries, provides medical professional liability insurance in the United States. The company is focused primarily in the Midwest, with Michigan, Illinois, Ohio, Kentucky and New Mexico serving as its core states. ACAP ranks 17th nationally among professional liability insurers, with approximately 9,600 policies in-force.

When ACAP was first highlighted as a Value pick on Aug 31, 2006, its strong history of topping analysts’ earnings expectations was noted. In the two quarters that have elapsed since its debut, the company posted two more positive surprises. ACAP has now exceeded the consensus estimate in 13 consecutive quarters, including eight double-digit percentage surprises and three of the triple-digit variety. Furthermore, the company continues to trade at a discounted valuation.

On Feb 14, ACAP posted fourth-quarter profits of 96 cents per share. The result surpassed the consensus estimate of 82 cents by 17.1% and marked a 43.9% year-over-year improvement. The combined ratio, a measure of profitability for insurance companies, was 83.6% for the quarter, versus 91.5% 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.

For the entire year, the combined ratio improved to 87.5%, compared to 97.5% for last year. President and CEO R. Kevin Clinton stated, "APCapital had a very successful and profitable year in 2006. Our strategic plan of focused operations and strict underwriting continues to be effective. We have produced a solid and profitable book-of-business, generating a 16.5% return on beginning shareholders' equity."

Over the past 60 days, consensus estimates for this quarter and next have risen three cents and five cents to 86 cents and 88 cents, respectively. Profit forecasts for this year and next have risen 19 cents and 15 cents, respectively, over the same period of time.

ACAP repurchased 190,650 shares of its common stock during the fourth quarter of 2006. For the entire year, the company bought back 1,075,350 shares. On Oct 27, 2006, the Board of Directors approved a new stock buyback plan for 2007 and authorized the repurchase of $32 million of its common shares.

ACAP is currently trading at a valuation of 10.8x current fiscal-year estimated earnings and at 11.1x next fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 16.0x current fiscal-year estimated earnings and at 14.5x next fiscal-year estimated earnings. The company has a price-to-book ratio of 1.7 compared to 4.4 for the market.

Content Courtesy: Zacks Investment Research

#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.

==============================================

6B) MAF Bancorp (MAFB)

Recently, when MAF Bancorp (MAFB) was trading at around $45.50 per share, Zacks senior banking analyst Scott Jaggers, CFA put a Sell recommendation on it. Now that the share price has fallen under $40, he is once again upping his rating to a Hold. The following are excerpts from his recent report:

“We are upgrading MAFB to a Hold at this time, while lowering our price target by $2. The additional detail provided in the 10-K painted a less attractive picture of the Q4 average balance sheet than we had previously assumed, and our estimates are falling by another $0.03-0.04 per quarter (in addition to the decline that prompted our downgrade).

“Pricing now looks much more reasonable relative to peers using either of our primary metrics, but the stock does not look cheap to us even after its significant fall. Peer multiples are likely to ebb and flow as much based on acquisition speculation as on fundamentals, however, which is one reason we have elected to upgrade the shares after a significant pull-back in the group.

“MAFB currently trades at 13.3 times the consensus forward estimate (versus 14.1x at the time of our January 30 Note), an 8% premium to the peer group median, vs. a 3% premium at that time. On a price-to-book [P/B] basis, the shares trade at a 13% discount to the peer group median, vs. a 10% discount in late January.

“Relative pricing still looks somewhat full on a P/E-to-growth (PEG) basis, using the consensus forward estimate and the consensus long-term growth rate. MAFB's PEG ratio is now 1.67, a 6% premium to the 1.57 median for the peer group (vs. a 7% premium previously). On a price-to-book basis, the 13% discount now looks quite full, given a GAAP [generally accepted accounting principles] trailing ROE [return on equity] 38% below median, as the ROE-adjusted P/B is now 16% above the peer median (vs. a 2% premium previously). However, the GAAP figure is much lower than either the core trailing ROE for MAFB (which we calculate as 9.6%) or our projected ROE for 2007 at 8.8%, either of which would make the adjusted P/B look much more in line at this time.”

Read the analyst report on MAFB

==============================================

Complimentary investing tools for our subscribers, click here

==============================================

7) About VitalStocks.com:

I believe America has incredible opportunities for people to succeed by making money in the stock market. After making and losing lots of money myself, I realized that there were no sources were investors could get unbiased valuable information.

That is what made me begin this project. I continue to work with the top professional investing newsletters to bring “capsules” of their best stock picks to you.

Please help keep them participating in our newsletter, follow their links and see what services they provide. Please consider sharing this with your friends. All will benefit.

RSS Feed available: Fresh content each weekday http://feeds.feedburner.com/VitalstocksInvestingNewsletterDigest

==============================================

8) DISCLAIMER: "VitalStocks.com is an independent republisher of investment advice. The companies, or newsletters, whose stocks we republish, compensate neither the company or its employees in any way, and we hold no positions in the securities aforementioned. Sources of information are assumed to be reliable, but they are in no way warranted to be complete. Recommendations, opinions or suggestions are given with the understanding that subscribers acting on information assume all risks. Readers must keep in mind that, "Past performance doesn't predict 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."

VitalStocks.com
460 NW Heron Avenue
Mountain Home, ID 83647-2444