(DITC) - met or exceeded earnings estimates for each of the past 16 quarters

Ditech Communications Corporation (DITC) has met or exceeded earnings estimates for each of the past 16 quarters. Estimates for 2007 increased 23.8% to 26 cents over the past seven days. The stock is currently trading at 40.8x 2007 estimates, compared to the long-term growth rate of 25%, giving DITC a PEG ratio of 1.63. Full Analysis Ditech Communications Corporation (DITC) engages in the design, development, and marketing of telecommunications equipment for use in canceling echo and enhancing voice quality in voice calls over wireline, wireless, satellite and IP telecommunications networks. Ditech's voice processing products are used by mobile and wire-line operators for circuit and packet based networks. Its products include voice enhancement and echo canceller solutions. The company is benefiting from a rebound in the telecommunications market as evidenced by its fiscal 2006 third-quarter results. Revenues for the third quarter were $14.0 million, up 33% from revenues of $10.5 million in the second quarter of fiscal 2006 and a decrease from $21.3 million from the third quarter of the prior fiscal year. The company broke even on an earnings per share basis, which was two cents better than expected. "We moved the company forward dramatically in the third quarter," said Tim Montgomery, Ditech Communications' president and CEO. "We delivered exceptional performance in our North American voice processing business. Additionally, in our international business, we announced the ongoing deployment of our VQA product within a major international carrier network. We enter the fourth quarter with momentum and a positive outlook for growth and profitability." Earnings momentum is strong as the company has met or exceeded earnings estimates for each of the past 16 quarters. Estimates for 2007 increased 23.8% to 26 cents over the past seven days. The stock is currently trading at 40.8x 2007 estimates, compared to the long-term growth rate of 25%, giving DITC a PEG ratio of 1.63. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. The ranks are updated every Monday morning on Zacks.com. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. 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.

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Reliance Steel & Aluminum Co. (RS) - topping analysts' expectations in the last quarter

Reliance Steel & Aluminum Co. (RS), a stock that we first featured on Dec 14, 2005, recently reported record full-year and fourth-quarter 2005 results. The company continued its winning ways by once again topping analysts' expectations in the last quarter. RS maintained its Zacks #1 Rank status as a result. Furthermore, on Feb 16, 2006, the company issued first-quarter 2006 earnings per share guidance above analysts' estimates. The company has a price-to-book (P/B) multiple of 2.7. Full Analysis Reliance Steel & Aluminum Co. is one of the largest metals service center companies in the United States. Through a network of metals service centers, the company provides value-added materials management and metals processing services and distributes a full line of metal products, including carbon, alloy, stainless and specialty steel, aluminum, brass and copper products. RS was first highlighted as a Value pick on Dec 14, 2005, and had made a habit of exceeding the consensus earnings estimate. On Feb 16, 2006, the company continued this trend. RS posted fourth-quarter 2005 earnings per share of $1.83, which beat the Street by 3.4% and surpassed its fourth-quarter 2004 profits by 39.7%. The company has now exceeded analysts' expectations in eight straight quarters by an average margin of 15.8%. Fourth-quarter 2005 revenues were up 17.0% when compared to the prior year's period. For the entire year, the company's profits amounted to $205.4 million—RS's best-ever financial results. This compares with profits of $169.7 million achieved in 2004. Revenues for 2005 totaled a record $3.4 billion versus 2004 revenues of $2.9 billion. Reliance Steel & Aluminum Co. followed up its record year by issuing first-quarter 2006 earnings per share guidance above analysts' estimates. The company announced that it now expects earnings of between $1.90 and $2.00 per share. Analysts remain extremely optimistic about RS. Estimates for the current quarter, as well as for the second quarter of 2006, are on the rise. Forecasts for this quarter's profits currently stand at $1.99—55.5% higher than the consensus of 60 days ago. The consensus earnings estimate for the second quarter of 2006 increased by 52.9% over the same time period. Forecasts for full-year 2006 profits jumped 60.9% over the past two months. Despite the company's history of profitability and its encouraging outlook, RS continues to trade at a discounted valuation. Reliance Steel & Aluminum Co. has a price-to-book (P/B) multiple of 2.7. The stock trades at a valuation of 13.7x trailing 12-month earnings and at 11.5x its current fiscal year estimated earnings. The company has a PEG ratio of 0.76. RS paid a quarterly dividend to its shareholders for 46 consecutive years. The company has a current dividend yield of 0.47% and a five-year average dividend yield of 0.90%. RS's ROE of 22% is in line with the industry average but impressive nonetheless. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. The ranks are updated every Monday morning on Zacks.com. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. 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.

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Last Week's Edition - Sunday, February 19, 2006

VitalStocks.com Professional Investing Newsletter Digest "Unbiased Advice from America's Top Investing Newsletters" Sunday, February 19, 2006 Volume 6, Issue 7 In This Issue: 1) Current Market Metrics - Mutual Fund Flows 2) Recent Blog Research Features 3) Viewing the Market A) End Of Line? Investors wonder whether this is the end of the rally in the favored sectors B) Rate Inversion A Concern C) Money Market Mutual Fund Assets 4) Feature Stock #1 - Anadarko Petroleum (APC) 5) Feature Stock #2 - Martin Marietta Materials, Inc. (MLM) 6) Additional Stocks - Worth a Further Look A) Armor Holdings, Inc. (AH) B) Molecular Devices (MDCC) 7) About VitalStocks.com 8) DISCLAIMER: Use of this newsletter signifies your acceptance of this disclaimer. Note to Readers: 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 A check of our statistics shows that only 3 or 4 readers click on the further research links we provide to other websites. Starting this week, those links will not be featured in favor of other, more useful content in the future. You can influence what that content might be. Have a research website you like? Tell us about it and we might share it with everyone here a well as to make it a regular feature. Submit all comments or ideas, here: click here. This issue sponsored by... ============================================== Free Market Forecasts - Nearly 80% Accuracy VantagePoint's leading (not lagging) indicators prove nearly 80% accurate in predicting trend directions for more than 69 financial markets. Click today for complimentary forecasts in the market of your choice. Also access key information from "Trend Forecasting With Technical Analysis". http://a.gklmedia.com/vtstocks/nl/44 ============================================== 1) Current Market Metrics: - NEW YORK, Feb 16 (Reuters) - U.S.-based stock funds took in a net $2.3 billion in the week ended Feb. 15, less than the $3.9 billion that the stock funds added in the prior week, TrimTabs Investment Research estimated on Thursday. Full Story/Source --------------------------------------------------------------------- Independent Data on Fund Flows Data As Of: 15 February 2006 - Equity Fund Inflows $1.6 Bil; Taxable Bond Fund Inflows $508 Mil xETFs – Equity Fund Inflows $1.6 Bil; Taxable Bond Fund Inflows $399 Mil - Excluding ETF activity, for the first time on record, more than 700 International Equity fund share classes report net inflows for seven consecutive weeks; Source: http://www.amgdata.com/ ============================================== 2) Recent Research Articles - Actionable investment research and commentary, unedited, straight from the pros. (Click to read the entire post) 2A) Aspen Technology (AZPN) - set a new 52-week high following its earnings surprise of 100%: http://www.vitalstocks.com/blog/2006/02/aspen-technology-azpn-set-new-52-week.html 2B) L-3 Communications Holdings, Inc. (LLL) - topped earnings estimates for 12 quarters - issued 2006 earnings guidance above analyst estimates: http://www.vitalstocks.com/blog/2006/02/l-3-communications-holdings-inc-lll.html 2C) Warren Buffett Triples Lexmark, Sold Shaw Communications, Reveals Holdings in Wells Fargo: http://www.vitalstocks.com/blog/2006/02/warren-buffett-triples-lexmark-sold.html 2D) Rhodes Report newsletter - Chicago Fed President Moskow on the U.S. Economic Outlook: http://www.vitalstocks.com/blog/2006/02/rhodes-report-newsletter-chicago-fed.html 2E) OTC Insight newsletter - world's largest online movie rental service and take a sneak peek into Collins' Buy List portfolio: http://www.vitalstocks.com/blog/2006/02/otc-insight-newsletter-worlds-largest.html ============================================== 3) Viewing the Market: Financial analysts / journalists comment on the current stock market and future direction. 3A) End Of Line? Investors wonder whether this is the end of the rally in the favored sectors These opening weeks of February have actually seen a nasty correction occurring in the stock and commodity markets. The correction has not been indiscriminate. As we commented in Friday's Hotline, the profit-taking occurred where there were significant profits to realize and not elsewhere. As is the case with all profit-taking corrections, investors wonder whether this is the end of the rally in the favored sectors. In this case, the issue is whether the rally is over for emerging markets, for Asia, for natural resources? We don't think so. The one reason for investors to leave these sectors is if their stocks were overvalued. These stocks are by no means cheap but neither are they overvalued. And meanwhile growth continues. The expected growth rates in Asia and emerging markets have not suddenly been downgraded. All that has changed, in our opinion, is that we had a fierce rally in January, so strong that it invited profit-taking, which then built on itself. Our outlook remains unchanged. We remain generally positive toward equities, here and abroad. There is no change in our recommended allocations. 3B) Rate Inversion A Concern The market had little to work on this week in terms of new economic data, as a result speculation about the market outlook, interest rates, inflation and what-have-you, drove much of this week's trading. With very little to work with, profit-taking prevailed most of the week. There was one pattern that emerged and that was better performance by the large caps compared to the small caps. We saw that in play today. Of course, that is consistent with the profit-taking theme. After all, the small-caps are where profits have been made, while the large-caps have produced little in the way of profits to take. Another theme today was concern over the economy as long-term interest rates remain below short-term rates. Somehow many on Wall Street cannot accept that this rate inversion is different because of the huge foreign buying of our bonds. We saw this today as the new 30-year Treasury was snapped up by foreign buyers who drove the yield below that of the 10-year Treasury. Fear was not at work today. We remain generally positive toward equities, here and abroad. There is no change in our recommended allocations. Source: Moneyletter.com 3C) Money Market Mutual Fund Assets February 16, 2006 Washington, DC, February 16, 2006 - Total money market mutual fund assets decreased by $2.07 billion to $2.038 trillion for the week ended Wednesday, February 15, the Investment Company Institute reported today. Retail: Assets of retail money market funds decreased by $456.0 million to $849.00 billion. Taxable money market fund assets in the retail category increased by $220.5 million to $641.34 billion, and tax-exempt fund assets decreased by $676.5 million to $207.66 billion. Institutional: Assets of institutional money market funds decreased by $1.61 billion to $1.189 trillion. Among institutional funds, taxable money market fund assets decreased by $4.02 billion to $1.052 trillion, and tax-exempt fund assets increased by $2.41 billion to $137.34 billion. ICI reports money market fund assets to the Federal Reserve each week. Revisions are due to data adjustments, reclassifications, and changes in the number of funds reporting. The Institute also provides other statistical reports on investment companies, including monthly reports on five broad categories of mutual funds. Source: Investment Company Institute Press Release ============================================== Share this issue with a friend ============================================== 4) Feature Stock #1 – Anadarko Petroleum (APC) Originally Published 16 February 2006 A sampling of Adamo's portfolio updates: Anadarko Petroleum (APC) reported Q4 earnings of $3.73 per diluted share – up 127% from last year's comparable quarter. Full year earnings were up 63%. The company lightened up on its hedging toward the end of the year. That's why the fourth quarter rise was so much higher than the full year's. The average price received for natural gas in Q4 was $9.94 - much closer to the spot price than prior quarters. Similarly, the company averaged $52.16 per barrel of oil compared to only $39.16 in Q4 last year. The company added 291 million equivalent barrels of proved reserves during the year, ending 2005 with a six percent increase in reserves, excluding asset sales. Several of Anadarko's deepwater Gulf of Mexico projects will ramp up or begin production in 2006. That could provide oil volume growth near 10%. Full Story: http://www.zacks.com/experts/featured/view_article.php?art_id=2397&newsletter_id=190 Description: Anadarko Petroleum Corporation is one of the world's largest independent oil and gas exploration and production companies. Majority of the company's total proved reserves are located in the U.S., primarily in the mid-continent (Kansas, Oklahoma and Texas) area, offshore in the Gulf of Mexico and in Alaska. Most of the company's production is domestic and the remainder is from Algeria. The company also owns and operates gas gathering systems in its U.S. core producing areas. Source: http://www.zacks.com/research/report.php?type=report&t=APC VitalStocks.com Research Summary: Price / Cash Flow Ratio is only 76.3% of the Industry Average Forward Price to Earnings Growth (PEG) is only approx. 0.77 Debt / Equity Ratio is 66.7% of the Industry Average Net Profit Margin is 263.6% of the Industry Average Return on Equity is 122.9% of the Industry Average Current P/E Ratio is 55.7% of the Industry Average ============================================== 5) Feature Stock #2 – Martin Marietta Materials, Inc. (MLM) Originally Published 16 February 2006 #1 Ranked Stocks Highlight Martin Marietta Materials, Inc. (MLM), a Zacks #1 Rank stock, recently reported strong fourth-quarter and full-year 2005 results. The company also issued earnings per share guidance above analyst's estimates for the first quarter and full year of 2006. EPS are forecasted to grow 20.0% over the next 3-5 years. MLM has a current dividend yield of 1.0%. Full Analysis Martin Marietta Materials, Inc. is a producer of aggregates for the construction industry, including highways, infrastructure, commercial and residential. The company also manufactures and markets magnesia-based products. MLM operates in two segments, aggregates and specialty products. MLM has exceeded analysts' earnings expectations for the past four quarters by an average margin of 18.2%. Earnings per share have grown 11.5% over the past five years. Going forward, they are forecasted to grow by a larger magnitude—20.0% over the next 3-5 years. On Feb 9, 2006, Martin Marietta Materials, Inc. posted earnings per share of $1.04, which topped the Street by 18.2% and surged past the prior year's period by 40.5%. The company cited that cost-cutting efforts offset high energy prices enabling it to report strong fourth-quarter financial results. Profits increased to $47.8 million, compared to $37.0 million in the fourth quarter of 2004. Revenues rose 15.5% to $503.8 million from $436.1 million last year. The growth in magnesia specialties helped fuel the jump in revenues. For the full year, profits and revenues increased 49.2% and 15.6%, respectively, when compared to 2004. ============================================== 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 ============================================== MLM responded to its strong fourth-quarter and full-year 2005 results by issuing first-quarter and full-year 2006 earnings per share guidance above analysts' estimates. The company now expects EPS for 2006 to be between $4.90 and $5.25. For the first quarter of 2006, MLM expects earnings of between 30 cents and 45 cents per share. Analysts' estimates have doubled for the first quarter of 2006 over the past 30 days. The consensus estimate now stands at 44 cents. Analysts' forecasts for full-year 2006 profits have jumped 15.0% over the same time period. MLM expects aggregates pricing to rise 9% to 11% in 2006. The company cited continued heavy demand, rising transportation costs and supply constraints as the reasons behind the increase. Demand for aggregates products is expected to increase 2% to 4%. The specialty products segment is expected to show continued improvement in 2006 as well. The company's return on equity is in line with the industry average—16%. The stock trades at a valuation of 23.4x trailing 12-month earnings and at 18.1x its current fiscal year estimated earnings. MLM bought back 2,658,000 shares of common stock during the past year. Investors requiring a stream of cash flow from their investment in Martin Marietta Materials, Inc. have enjoyed a current dividend yield of 1.0% and a five-year average dividend yield of 1.6%. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. The ranks are updated every Monday morning on Zacks.com. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Source: http://www.zacks.com/rank/index.php?id=2239 ============================================== Free Market Forecasts - Nearly 80% Accuracy VantagePoint's leading (not lagging) indicators prove nearly 80% accurate in predicting trend directions for more than 69 financial markets. Click today for complimentary forecasts in the market of your choice. Also access key information from "Trend Forecasting With Technical Analysis". http://a.gklmedia.com/vtstocks/nl/44 ============================================== Business Description: Martin Marietta Materials supplies the materials that build the world around you. Martin Marietta Materials' principal operating businesses are: Martin Marietta Aggregates – the second largest producer of crushed stone, sand and gravel in the United States. The Company's network of more than 300 quarries and distribution facilities spans coast to coast through 28 states, the Bahamas and Nova Scotia. Martin Marietta Magnesia Specialties – a leading U.S. manufacturer of magnesia-based chemical products used in a variety of industrial, agricultural and environmental applications and a producer of dolomitic lime. Other operating entities include: Martin Marietta Composites – a supplier of fiber-reinforced polymer products for use in military, infrastructure and transportation applications, namely panels, bridge decks and railcar components. Martin Marietta Materials sells surplus and used equipment from the Aggregates division Surplus Equipment Web site. Source: http://www.martinmarietta.com/Corporate/profile.asp VitalStocks.com Research Summary: Price / Cash Flow Ratio is 55.2% of the Industry Average Forward Price to Earnings Growth (PEG) is approximately 0.86 Debt / Equity Ratio is 131.1% of the Industry Average Net Profit Margin is 417.4% of the Industry Average Return on Equity is 238.8% of the Industry Average P/E Ratio is only 33.9% of the Industry Average ============================================== 6) Additional Stocks - Worth a Further Look 6A) Armor Holdings, Inc. (AH) Originally Published: 17 February 2006 Armor Holdings, Inc. (AH) has topped analysts' earnings estimates for nine consecutive quarters. Earnings per share have grown 56.9% over the past five years. Encouraged by a strong year in 2005, the company issued first quarter and full year 2006 guidance above analysts' estimates. This Zacks #1 Rank stock has increased revenues for the past 10 years. AH has a price-to-book ratio of 2.7. Full Analysis Armor Holdings, Inc. is a leading manufacturer and provider of specialized security products, training and support services related to these products, vehicle armor systems, military helicopter seating systems, aircraft and land vehicle safety systems, protective equipment for military personnel and other technologies used to protect humans in a variety of life-threatening or catastrophic situations. AH has exceeded the consensus earnings estimate for the past nine quarters by an average margin of 8.3%. Earnings per share have grown 56.9% over the past five years. On Jan 31, 2006, Armor Holdings, Inc. posted fourth-quarter earnings per share of $1.08, which topped the Street by 5.9% and blew away its prior year's profits by 46.0%. Revenues for the period amounted to $452.7 million, a 34.1% increase from the $337.5 million the company achieved in the fourth quarter of 2004. The company pointed to strong growth in its aerospace and defense division. For the full year, profits soared 64.6% to $132.5 million. AH reported profits of $80.5 million in 2004. Revenues increased 67.1%. Armor Holdings, Inc., encouraged by a strong 2005, issued first quarter and full year 2006 guidance above analysts' estimates. The company announced that it expects revenues between $1.71 and $1.77 billion for the full year and earnings per share between $4.10 and $4.30. AH's previous guidance was EPS at a minimum of $3.55. For the first quarter of 2006, the company expects EPS between $1.05 and $1.10. The consensus earnings estimate for the current quarter and the second quarter of 2006 rose 13.7% and 8.4%, respectively, over the past 30 days. Analysts' estimates for full-years 2006 and 2007 have also been trending higher, jumping 16.4% and 25.1%, respectively, over the same time period. AH has increased revenues over the past 10 years. The company has grown profits for the last three years. Heading into 2006, the company is very optimistic about its aerospace and defense segment and also expects to have excellent opportunities in its law- enforcement products and mobile security segments. The company has a price-to-book (P/B) multiple of 2.7. AH has been more profitable than its peers as is represented by its return on equity of 22%, compared to 13% for the industry. The stock trades at a valuation of 13.0x trailing 12-month earnings and at 12.1x its current fiscal year estimated earnings. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. The ranks are updated every Monday morning on Zacks.com. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Source: http://www.zacks.com/rank/index.php?id=2245 ============================================== 6B) Molecular Devices (MDCC) Originally Published: 16 February 2006 Molecular Devices (MDCC), a Zacks #1 Rank stock, rises to its highest levels in nearly five years on the basis of a 22% earnings surprise. Company Profile Molecular Devices Corp. develops bioanalytical measurement systems that accelerate and improve drug discovery and other life sciences research. Their systems enable pharmaceutical and biotechnology companies to leverage advances in genomics and combinatorial chemistry by facilitating the high throughput and cost effective identification and evaluation of drug candidates. The company's instrument systems are based on their advanced core technologies which integrate their expertise in engineering, molecular and cell biology and chemistry. Full Analysis MDCC reported earnings on Feb 7 at 39 cents per share for the quarter ended Dec 2005. This represents a 62.5% improvement over the same quarter last year, when MDCC earned 24 cents per share. Analysts were expecting MDCC to report 32 cents, so the announced earnings represented a 21.9% surprise over the consensus estimate. Exceeding consensus estimates is by no means unusual at MDCC, as management has not disappointed in the last 14 quarters. In addition, MDCC has delivered a positive earnings surprise in nine of the last ten quarters. Sales were also up for the quarter by 34.2% over last year. Income grew by nearly 200%, from $6.58 million in the 2005 quarter versus $2.2 million in 2004 quarter. Clearly from the chart pattern, the market is rewarding the improving financials at MDCC. The stock has been on a mild but steady increase for three and a half years now. So far in 2006 the stock is up a respectable but rather boring 4.9%. With yesterday's price action, that rate of change for the increase may well be accelerating. Volume on yesterday's new high was more than twice normal volume, a strong indicator that investors are putting their money where their mouths are when it comes to MDCC. Overhead resistance is more than four and a half years old, long enough to question how effective that resistance is likely to be. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. The ranks are updated every Monday morning on Zacks.com. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Full Story: http://www.zacks.com/rank/index.php?id=2236 ============================================== Share this issue with a friend ============================================== 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. Read More: http://www.vitalstocks.com/about_us.htm ============================================== 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

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U.S. Bancorp (USB) - Addition to the Hot List

John Reese, editor of the Validea Hot List newsletter, provides recent returns for his Validea Hot List. Find out where the portfolio stands compared to the S&P 500. Then read about three of the holdings. Learn about a guru strategy as it relates to a bank stock, take a look at a well-known oil company and check out a life insurance addition. The Validea Hot List Performance from February 10 The Validea Hot List continues to outperform the S&P 500. Since the Validea Hot List's inception, it has produced a return of 142.0 percent versus the S&P 500's return of 26.3 percent for the same period. Year to date, the Validea Hot List has had a return of 9.0 percent, compared with 1.2 percent for the S&P 500. Since our last newsletter two weeks ago, the Validea Hot List has gone down 1.0 percent, during a period when the S&P 500 fell .8 percent. An Addition to the Hot List U.S. Bancorp (USB) USB is favored by two guru strategies. One of the gurus is David Dreman. The David Dreman Strategy One of the strategies that gives U.S. Bancorp "strong interest" is the one based on John Reese's interpretation of David Dreman's approach to investing. It wants companies that rank among the 1,500 largest, which is true for U.S. Bancorp. One test U.S. Bancorp doesn't pass is that of earnings rising for the most recent quarters - U.S. Bancorp's earnings were flat. But it does get a passing grade for having an EPS growth rate that's higher than that of the S&P 500 and likely to continue to be so in the near future. Four criteria are used to determine if a stock is contrarian, and to be considered contrarian, two of these four tests must be passed. U.S. Bancorp passes two of them - its P/E ratio and price-to-dividend ratio are in the bottom 20% of the overall market. The two tests it doesn't pass are the price-to-cash flow and price-to-book ratios, which also should be in the bottom 20% of the overall market. It's not enough that the stock is priced low. It is essential that the company be financially healthy. The Dreman strategy uses several tests to determine a company's financial wellbeing. These include having a payout ratio below the company's historical payout ratio, a return on equity greater than the ROE earned by the top third of the 1,500 largest cap stocks, pretax profit margins of at least 8% (with above 22% considered phenomenal - U.S. Bancorp's is 39.59%) and a yield that is high (U.S. Bancorp's yield is 4.46% while the market yield is 2.48%). U.S. Bancorp passes all of these tests. A Sampling of the Hot List Chevron Corp. (CVX), formerly ChevronTexaco Corporation, manages its investments in subsidiaries and affiliates, and provides administrative, financial and management support to the United States and foreign subsidiaries that engage in fully integrated petroleum operations, chemicals operations, coal mining, power and energy services. The Company conducts business activities in the United States and approximately 180 other countries. Petroleum operations consist of exploring for, developing and producing crude oil and natural gas; refining crude oil into finished petroleum products; marketing crude oil, natural gas and the many products derived from petroleum, and transporting crude oil, natural gas and petroleum products by pipeline, marine vessel, motor equipment and rail car. Scottish Re Group Limited (SCT), formerly known as Scottish Annuity & Life Holdings, Ltd., is a holding company in the life reinsurance business. Through its subsidiaries, the Company is engaged in the reinsurance of life insurance, annuities and annuity-type products. These products are written by life insurance companies and other financial institutions located in the United States, as well as in many other countries around the world. It has operating companies in Bermuda, the Cayman Islands, Guernsey, Ireland, the United Kingdom and the United States. The principal subsidiaries are Scottish Annuity & Life Insurance Company (Cayman) Ltd., Scottish Re (U.S.), Inc. and Scottish Re Limited. On October 17, 2004, Scottish Re, Scottish Re (U.S.), Inc. and Scottish Re Life (Bermuda) Limited signed an asset purchase agreement with Security Life of Denver Insurance Company and Security Life of Denver International Limited, subsidiaries of ING. This article highlights the commentary of John Reese for the Zacks.com audience. John Reese provides insightful analysis, market commentary, and favorite recommendations on a timely basis in "The Validea Hot List" newsletter. Try it free for 30 days and see if you can improve your investment performance. Learn more about "The Validea Hot List" 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 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. Click here now.

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CNOOC (CEO) is my top Buy recommendation - Chinese Government Assists Some Sectors

Chinese Government Assists Some Sectors by Paul Cheung Feb 23, 2006 China, while still the fastest-growing economy on the globe, is proving to have unique characteristics that are likely to continue bedeviling investors. We spoke with senior analyst Paul Cheung, CFA about where in China investors should be focused right now. What industries are growing the fastest in China at the present time? The Internet, financial and resource industries are growing the fastest in China at the present time. While China has more people using the Internet than does the U.S. and the U.K. combined, the penetration rate is still very low. The government wants this sector to grow, but is also worried about it since it could undermine their political control, thus the recent flap with Yahoo! (YHOO) where the government is attempting to censor certain topics on the net. The financial system is still quite underdeveloped, and getting loans from the banking system is often more related to political connections than to the soundness of the business plan. A more modern financial sector would lead to better allocation of capital, and thus more sustainable long-term growth. China's demand for raw materials – as it attempts to bring hundreds of millions from abject poverty to a reasonable standard of living – appears to be almost insatiable. Is the government taking steps to slow economic growth? How do you forecast the next six months will develop? The Chinese government won't take step to slow overall economic growth, but will take measures to slow the growth of some industries including steel, cement and real estate. I forecast the Chinese economy will continue to grow at about 9% over the next six months. In part, there is a feeling that these industries have been built up to fast in the recent past, due somewhat to the political connections with local governments. The overcapacity could lead to these industries facing severe pricing pressures or the need to export their production, which will just lead to more political problems on the trade imbalance front. Are any sectors in China slowing down without help of the government? Agricultural-related sectors in China will slow down without help from the government. Agricultural-related businesses will naturally slow because the agricultural industry is underdeveloped, and the income of rural people is far below that of urban people in China. At this time, the Chinese government is taking measures to stimulate the development of rural economy through tax subsidies and loans. Assuming China is still a good place for investors to put their money, what issues should investors be paying close attention to? Investors should pay attention to the Chinese government's promotion measures and regulations to certain industries. The Chinese government is expected to promote industries including resource conservation, environmental protection and industrial infrastructure upgrading. The means with which it plans to do this are through shortening the approval procedure, tax subsidies and loans. Industries that the government would regulate are those that waste resources and certain underdeveloped technology initiatives. It would do this by divesting from businesses in areas such as this and closing government-controlled plants and offices. As a result, it would be best to avoid those industries such as steel where the government is trying to discourage investment and to focus on those where the government is trying to increase investment such as oil and other natural resources. What is your top Buy recommendation at this time, and why? CNOOC (CEO) is my top Buy recommendation because of the high price of crude oil, high efficiency of CNOOC in China and Chinese government's support. CNOOC is one of the three largest state-owned petroleum and petrochemical companies in China. The company is China's largest producer of offshore crude oil and natural gas and one of the largest independent oil and gas exploration and production companies in the world. CNOOC is the only company permitted to conduct exploration and production activities with international oil and gas companies off China’s shore. The company is also one of the largest offshore crude producers in Indonesia. As of year-end 2004, CNOOC owned net proved reserves of approximately 2.2 billion barrels-of-oil equivalent and its annual average production was 382,513 barrels-of-oil equivalent per day. Paul Cheung, CFA is a Zacks senior analyst covering a variety of companies in the People’s Republic of China. Courtesy: http://www.zacks.com/newsroom/commentary/index.php?id=2627

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BRCM - exceeded earnings estimates for 13 consecutive quarters

Broadcom (BRCM) has exceeded earnings estimates for 13 consecutive quarters, with eight different analysts raising their numbers for 2006. Over the past 30 days, 2006 estimates have risen 25.6% to $2.16 per share. Full Analysis Broadcom (BRCM) is a fabless company, designing and marketing semiconductor components that network voice, video, and data traffic for applications in digital cable and satellite set-top boxes, cable and digital subscriber line (DSL) modems, high-speed local area networks (LANs), metropolitan area networks (MANs), long-haul networks, wireless communications, server solutions, and many more areas. Fueled by the broadband communications explosion, the company has enjoyed robust growth since its inception. The company pursues a strategy of delivering complete system-on-a-chip solutions to its customers. Such chips integrate inexpensively numerous functions in a way that is easy for customers to use. With the system-on-a-chip strategy, the company can leverage its core competencies in analog, digital, and mixed signal circuitry and address the requirements of many markets. Broadcom is fabless and, therefore, does not fabricate its own integrated circuits. This reduces the operational and financial risk of owning a manufacturing facility. Alternatively, it does not capture all of the benefits of cost reduction that accrue to a company that continually transitions to more efficient manufacturing technologies. Nonetheless, this strategy has enabled the company to stabilize gross margins, even when sales fall short. On Jan 26, Broadcom reported its financial results for the fourth quarter of 2005. Revenue was $820.6 million, up 18.1% sequentially and up 52.1% year over year. Broadband communications accounted for 30% of total revenue and grew 5% sequentially. Mobile and wireless made up 33% of total revenue and rose 44% sequentially. Enterprise networking represented 37% of total revenue and increased 12% sequentially. The company has exceeded earnings estimates for 13 consecutive quarters, with eight different analysts raising their numbers for 2006. Over the past 30 days, 2006 estimates have risen 25.6% to $2.16 per share. The stock is trading at 28.7x next year's estimates of $2.39 per share, which is slightly above the company's long-term growth rate of 26.83%, giving BRCM a PEG ratio of 1.07. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. The ranks are updated every Monday morning on Zacks.com. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. 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.

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SHOO - raised its full-year earnings guidance

Steven Madden, Ltd. (SHOO) recently raised its full-year 2005 earnings per share guidance. Analysts' earnings estimates have been on the rise for the current quarter as well as for 2005 and 2006. This Zacks #1 Rank stock has a price-to-book ratio of 2.4. The company’s preliminary results for the fourth quarter of 2005 are encouraging. Full Analysis Steven Madden, Ltd. engages in the design, sourcing, marketing and sale of footwear brands for women, men and children. The company's business consists of three segments: wholesale, retail and private label. SHOO sells its products primarily under seven brands: Steve Madden, Steven, l.e.i., Candie's, Stevies, Unionbay and Steve Madden Mens. The company also licenses its Steve Madden trademark for various accessory and apparel categories. On Jan 31, 2006, SHOO raised its full-year 2005 earnings per share guidance. Earnings per share are now expected to be between $1.35 and $1.38, compared to the company's previous estimate of between $1.20 and $1.22. The company attributed the revised outlook to strong wholesale revenue. Steven Madden, Ltd. expects that fourth-quarter EPS will be in the range of 49 cents to 51 cents. SHOO plans to report fourth-quarter results and provide a 2006 forecast on Mar 2, 2006. Steven Madden, Ltd. anticipates fourth-quarter net sales of between $90 million and $91 million, an approximate 7% to 8% increase over the $84.5 million reported in the prior year's quarter. During the fourth quarter, the company said it achieved significant improvements in gross margins with increases in all of the wholesale divisions as well as in the retail division. The company stated that their initiatives to more effectively manage inventory and improve margins are having a very positive impact on operations. SHOO plans to further build the Steve Madden brand and evolve the business into a global branded lifestyle company. This makes the company and investors optimistic about 2006 and beyond. Analysts' earnings estimates have been on the rise for the fourth quarter as well as for 2005 and 2006. The current consensus for the quarter stands at 50 cents, which marks an impressive 42.9% increase over the past 60 days. Forecasts for 2005 and 2006 increased by 12.5% and 8.2%, respectively, over the same time period. On Feb 8, 2006, SHOO announced that it had completed the acquisition of privately-held Daniel M. Friedman & Associates. SHOO believes the acquired company's accessories category is highly complementary to its current footwear business and that the acquisition ties in perfectly with its strategy of developing Steven Madden, Ltd. into a global lifestyle brand. SHOO has a price-to-book (P/B) multiple of 2.4. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. The ranks are updated every Monday morning on Zacks.com. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. 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.

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WFT - Eight analysts raised numbers for 2006

Weatherford International, Ltd. (WFT) has met or exceeded earnings estimates for eight out of the past nine quarters. Eight analysts raised their numbers for 2006. Over the past 90 days, estimates for 2006 have increased 14% to $2.28 per share. Full Analysis Weatherford International, Ltd. (WFT) is a leading manufacturer and provider of equipment and services used in the drilling, completion and production of oil and natural gas wells. The company's segments include: Drilling Services (DS) and Production Systems (PS). The Drilling Services division offers a variety of oilfield products and services, including drilling services and equipment, well installation services and cementing products, under-balanced drilling services, fishing and intervention services and expandable solid tabular systems. Through its Production Systems division, WFT provides a complete line of artificial lift equipment, product optimization services, completion products and systems and automation and monitoring of wellhead production. WFT is focusing on improving returns in its core business and enhancing its exposure to faster-growing new technologies and services. The focus is both internally through research and development and externally by making strategic acquisitions. The company is expected to spend $135 million on R&D during the year, roughly 3% of its total revenue, to help organic growth. New technologies are paying off as new offerings are enhancing drilling and production operations while contributing to bottom-line growth given the relatively higher margins on new products. The company recently tested new lifting and hazard reduction technologies that performed very well. Weatherford is steadily gaining pricing power. Areas of promise include the Middle East and North Africa where demand for under-balanced products remains strong. The company also plans to strengthen its pressure pumping position in North Africa. Russia and the Caspian region also hold good long-term potential, as both of these regions are expected to need a full array of products from drilling to production optimization and brown-field operations. Latin American growth should be headed by Brazilian operations and possibly Venezuela. The company has met or exceeded earnings estimates for eight out of the past nine quarters. Eight analysts raised their numbers for 2006. Over the past 90 days, estimates for 2006 have increased 14% to $2.28 per share. Despite the strong run in the stock, it is still attractively valued at 15x 2007 estimates, which is much lower than the long-term growth rate of 24.25%, giving WFT a PEG ratio of 0.62. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. The ranks are updated every Monday morning on Zacks.com. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. 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.

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Office Depot (ODP) - continues to surprise analysts and delight investors

Office Depot (ODP), continues to surprise analysts and delight investors. Background Office Depot, Inc., together with its subsidiaries, is the one of the largest suppliers of office products and services in the world. The company sells to consumers and businesses of all sizes through its three business segments: Stores, Business Services and International. As the largest seller of office products around the world, the company operates under the Office Depot, Viking Office Products, Viking Direct and 4Sure.com brand names. Full Analysis Explosive things started happening for ODP way back in July of 2005 when a 29% positive earnings surprise propelled the stock to a gap into historic high ground and an 11.5% higher close the next day. It took until late October to fill the gap that ODP left, but by then yet another positive earnings surprise was pushing the stock higher again. By Christmas, ODP was setting new 52-week highs once more. Now it looks like deja vu all over again to quote Yogi Berra. ODP released Q4 earnings of 36 cents per share on Feb 15, 2006. That number was 20% higher than the same quarter in 2004 and amounted to a 12.5% positive earning surprise over the consensus estimate of 32 cents. Sales were about unchanged from a year earlier while earnings actually fell a marginal 1.3% from the year earlier period. There was no explosion in ODP's stock price the day after the report was released, just a new 52-week high and a continuation of the long, steady uptrend that this stock has been in since setting its low on Oct 19, 2004. Moving Average Convergence Divergence (MACD) indicators have signaled a 'Buy' and the stock remains above both the long- term 200-day moving average and the more intermediate-term 50-day moving average. We like stocks like ODP that remain in long, dependable uptrends. While not as immediately gratifying as a stock making a dramatic turnaround, ODP's price action signals that the market notices and approves of management's direction. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. The ranks are updated every Monday morning on Zacks.com. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. 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.

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A Positive Story in 2006 - AMD - WFR - ATML - ATHR - ONNN

A Positive Story in 2006 By James Giaquinto Feb 16, 2006 Last year turned out to be very good for the semiconductor industry, as consumers took the reins and helped drive a new record for worldwide sales. As previous Industry Outlook articles have mentioned, this switch to consumer demand from corporate IT is not a blip on the screen, but a fundamental shift that could set the table for an equally impressive performance this year. "We believe that the semiconductor industry is a positive story in 2006, as inventory issues have been resolved and consumer demand drives seasonally strong sales," said Zacks Equity Research analyst Ken Nagy. This positive outlook for the year is underscored by the Semiconductor Industry Association (SIA). The SIA expects worldwide sales of semiconductors to grow 7.9% to $245 billion in 2006. This comes after a stellar 2005 when worldwide sales increased 6.8% to a record $227.5 billion, compared to $213 billion in 2004. Fourth quarter sales reached $59.86 billion, gaining 8.6% and 2% on a year-over-year and sequential basis respectively. Furthermore, the SIA expects the market for semiconductors to continue growing at a compound annual rate of 10%, which it said was "remarkable" for a $227-billion-dollar industry. The Association's annual forecast for 2005-2008 predicts worldwide sales of $309 billion in 2008, or 45% atop that of 2004. Consumers are leading this charge, as their appetite for cell phones, digital cameras and televisions, and MP3 players, along with other products, seem to be growing. In 2004, more than half of the semiconductors sold went into products purchased by consumers. That trend continued in 2005 and will most likely be the case again in 2006. "This proportion will continue to grow in the years ahead, as consumers all over the world are captivated by the richness and portability of digital media," said Nagy. "Advances in computing, digital media processing and wireless technology are enabling the industry to create lifestyle-changing devices and gadgets that could only be imagined a few years ago." Leaders in the Industry Advanced Micro Devices ( AMD ) is a leading global provider of innovative microprocessor solutions for computing, communications and consumer electronics markets. Bolstered by record processor sales and profits, Advanced Micro Devices put together a solid fourth quarter performance and took some market share from its main rival Intel. In mid-January, the company posted earnings of 45 cents per share, excluding a charge, on sales of $1.84 billion. The earnings result marked a substantial year-over-year improvement and also beat the consensus by 80%. Sales advanced 45% on a year-over-year basis and 21% sequentially. "AMD's growth rate increased in the fourth quarter resulting in continued market share gains across server, desktop and mobile product lines," said CFO Robert J. Rivet. "In addition to solid execution against our product and technology strategies, we made significant strides in the quarter to improve our balance sheet by significantly reducing our debt and increasing our cash and short-term investment balance to $1.8 billion." For the first quarter of 2006, AMD expects sales to be flat to slightly down seasonally from the fourth quarter, which would approach a 70% rise from comparable sales in the first quarter of 2005. MEMC Electronic Materials, Inc. ( WFR ) is the world's largest public company solely devoted to the supply of wafers to semiconductor device manufacturers. Excluding a benefit, MEMC Electronic Materials posted fourth quarter earnings per share of 40 cents in late January, which beat Wall Street expectations by more than 14%. The result was also more than enough to surpass the year-ago total. Net sales reached $317.3 million, or 18.2% above $268.4 million in the fourth quarter of 2004. On a non-GAAP basis, which excludes the above-mentioned benefit, net sales were $304.8 million. The company stated that the stronger pricing environment materialized and contributed to good incremental margins, while unit demand for the semiconductor and solar industries continued to show strong growth. Furthermore, MEMC Electronic Materials sees no short-term indicators that this demand will slow. For the full year, net sales advanced 9.4% to $1.13 billion, versus $1.03 billion in 2004. Net income rose to $338.2 million, or $1.49 per share, from $226.2 million, or $1.02, in 2004. "We are pleased with the improvement in our results in 2005," said CEO Nabeel Gareeb. "We saw strong revenue growth, margin expansion, and even faster EPS growth, all in a year that had extremely soft demand dynamics in the first half." As for the first quarter 2006, MEMC Electronic Materials expects sales of $315 million to $320 million, marking a rise of 3% to 5% rise from the non-GAAP fourth quarter 2005 result. For fiscal 2006, the company expects revenues between $1.3 billion and $1.5 billion with non-GAAP earnings per share between $1.40 and $1.70, assuming that the current environment continues. Atmel Corporation ( ATML ) designs, develops, manufactures and sells integrated circuit products. Atmel Corporation called the second half of 2005 a "turnaround" for the company, as it was able to achieve revenue growth while reducing products and expenses that are not core to its business. In the fourth quarter report, which was announced in late January, the company returned to profitability. Excluding items, earnings per share reached five cents, reversing a year-ago loss and topping the loss expected from the consensus. Revenues reached $425.2 million, gaining 4.1% from $408.3 million a year earlier. The result also improved 1.6% sequentially. The company's President and CEO, George Perlegos, mentioned that Atmel improved gross margin, returned to profitability and strengthened its balance sheet in the quarter, and expects the momentum to continue in 2006. For the first quarter, Atmel expects revenues to be flat to down 2% sequentially, reflecting normal seasonality. Atheros Communications, Inc. ( ATHR ) is a leading developer of semiconductor system solutions for wireless communications products. The company combines its wireless systems expertise with high-performance radio frequency (RF), mixed signal and digital semiconductor design skills to provide highly integrated chipsets that are manufacturable on low-cost, standard complementary metal-oxide semiconductor (CMOS) processes. Atheros Communications said its fourth quarter was "tremendous" across all metrics, with revenue gains in each product category. Non-GAAP earnings per share in the quarter reached 11 cents per share on revenue of $53.1 million. The earnings result more than doubled the year-ago result of five cents and also topped the consensus by as much as 57%. Revenue advanced 27% from $41.7 million in the fourth quarter of 2004. It also increased 16% sequentially. ON Semiconductor Corporation ( ONNN ) is a preferred supplier of power solutions to engineers, purchasing professionals, distributors and contract manufacturers in the computer, cell phone, portable devices, automotive and industrial markets. ON Semiconductor finished off a "significant year" with fourth quarter total revenues of $341.8 million. That result improved by 11% from the previous year's $306.8 million, and by 9% from the third quarter's $313.6 million. Furthermore, earnings per share improved on a year-over-year basis. "We exited the year with the highest gross margin and the first year of profitability since 2000," said President and CEO Keith Jackson. "We also shipped record units during the fourth quarter at an annualized run rate of approximately 30 billion units." Looking forward, ON Semiconductor is excited about the upcoming year as it looks to continue fueling its growth with new product designs and wins in the computing, consumer and wireless end-markets. The company expects total revenues of about $330 million in the first quarter, versus $302.4 million in the first quarter of 2005. Content Courtesy: Zacks Investment Research

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Keystone Auto (KEYS) - rallied to new high ground after its earnings report

Keystone Auto (KEYS), a Zacks #1 Rank stock, rallied to new high ground after its Jan 26, 2005 earnings report, but the party hasn't ended yet for investors. Background Keystone Automotive Industries, Inc. is one of the nation's leading distributors of aftermarket collision replacement parts produced by independent manufacturers for automobiles and light trucks. Keystone distributes products primarily to collision repair shops throughout most of the United States. In addition, the company recycles and produces chrome plated and plastic bumpers and remanufactures alloy wheels. The company's product lines consist of automotive body parts, bumpers, autoglass and remanufactured alloy wheels. Full Analysis KEYS beat consensus estimates for its fiscal third quarter when it reported earnings of 44 cents per share, a 76% improvement compared to the same quarter last year. Analysts had been expecting earnings of 36 cents. Sales grew 7.8% and income was up 87.1% as compared to the same quarter last year. Since the report, analysts following KEYS have raised their FY 2006 estimates, expecting further earnings improvement. Actually, KEYS has been in an uptrend since the middle of Oct 2005. However, the rate of the acceleration has increased since earnings were released on Jan 26, 2005. With Wednesday's market action, KEYS once again set a new 52-week high on heavier-than-normal market action. The extension of gains continuing more than two weeks after the earnings release indicates that this stock is still seeking a new higher level where supply and demand among investors is more in balance. The heavy trading volume gives further comfort to Momentum investors willing to buy the stock even at these levels. KEYS is comfortably above both its 200- and 50- day moving averages and those averages confirm the current uptrend as they too have positive slopes. As the stock is in new high territory, there is no logical point of resistance to further upward moves. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. The ranks are updated every Monday morning on Zacks.com. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. 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.

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