(WDC) - expectations have been upped for fiscal 2006 and fiscal 2007

The rise in earnings estimates for disk-drive maker Western Digital (WDC) suggests that fears about downward pressure on margins are overblown. Over the past 60 days, expectations have been upped for fiscal 2006 and fiscal 2007. Based on these forecasts, WDC is likely to continue to report strong growth. Full Analysis Western Digital designs and manufactures hard-disk drives. The company's products are used in PCs, enterprise applications (e.g. servers), DVRs, cable set-top boxes and external hard disk drive products. More than half of WDC's products are sold to original equipment manufacturers, including Dell (DELL) and Hewlett-Packard (HP). Revenues and earnings have grown steadily and strongly over the past five years. Sales have nearly doubled to $3.64 billion in fiscal 2005 from $1.95 billion in fiscal 2001. Earnings per share jumped to a profit of 96 cents per share in fiscal 2005 from a loss of 31 cents per share in fiscal 2001. WDC has generated positive cash flow from operations for four consecutive years. The stock recently dropped from a 52-week high on fears that the merger of Seagate Technology (STX) and Maxtor (MXO) would result in a price war. The data suggests such fears may be overblown. Over the past five years, WDC has enjoyed rising margins, with gross margins reaching 19.1% during the first half of fiscal 2006. More importantly, analysts have revised their expectations for fiscal 2006 and fiscal 2007 upwards. The current fiscal 2006 consensus estimate for profits of $1.49 is 32 cents above the forecast of just 60 days ago. The consensus estimate for fiscal 2007 profits of $1.73 per share is up 46 cents in the same timeframe. The consensus estimates equate to year-over-year growth rates of 48.7% for this fiscal year and 16.1% for fiscal 2007. Given the company's record of exceeding expectations – WDC issued positive earnings surprises during 15 out of the past 16 – these numbers could prove to be conservative. It is also worth noting that the stock's valuation of just 11x 2007 earnings leaves plenty of room for error, meaning that even if Western Digital's competitors exert greater pricing pressure, a rise in the stock's price could still be justified. 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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(AKS) - delivered a shocking 3600% earnings surprise with fourth quarter EPS of 35 cents

AK Steel (AKS) is a takeover candidate that reported a positive fourth quarter earnings surprise. Background AK Steel produces flat-rolled carbon, stainless and electrical steel products, as well as carbon and stainless tubular steel products, for automotive, appliance, construction and manufacturing markets. Full Analysis Right now there are two intriguing factors driving AKS' stock price. First is earnings and the second is a rumored buyout by US Steel. On Jan 24, 2006, AKS delivered a shocking 3600% earnings surprise with fourth quarter EPS of 35 cents, versus the analyst consensus of a penny loss. Following the release, every single analyst following AKS raised fiscal year 2006 projections. Not surprisingly, the stock gapped higher on the morning of the 24th and closed 27.8% higher on extraordinarily heavy volume. Just about the time that the euphoria was subsiding, reports surfaced that it was in acquisition talks with US Steel. On Mar 3, the stock again gapped higher on volume that was nearly as heavy as that of Jan 24. AKS closed the day 23% higher. Technical Review It's always a challenge to forecast takeover stocks and AKS is no exception. It is significant to note that the gap created on Mar 2, when news of the takeover talks surfaced, broke a major downtrend line, drawn from the peak more than a year ago. That peak was set on Feb 28, 2005 at 18.23. Also important to note is that the gap created on Mar 2 has yet to be filled. Clearly this is a stock reacting to an impressive earnings surprise with other factors built in. Given the breakout to the upside of a major downtrend, a positive Moving Average Convergence Divergence indicator, and unfilled gaps, AKS may be one takeover stock that you want to consider. 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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March 5, 2006 Issue - VitalStocks.com Professional Investing Newsletter Digest

VitalStocks.com Professional Investing Newsletter Digest "Unbiased Advice from America's Top Investing Newsletters" Sunday, March 5, 2006 Volume 6, Issue 9 In This Issue: 1) Current Market Metrics - Mutual Fund Flows 2) Recent Blog Research Features 3) Viewing the Market A) Stock Buybacks At Record Highs; Firms Actually Reducing 'Float' B) Stealth Stocks Update - On any pullback I am looking to be a buyer C) Super-Majors Help Fuel Alternatives 4) Feature Stock #1 - Hurco Companies, Inc. (HURC) 5) Feature Stock #2 - Chevron Corp. (CVX) 6) Additional Stocks - Worth a Further Look A) Smith International, Inc. (SII) B) Weatherford International, Ltd. (WFT) 7) About VitalStocks.com 8) DISCLAIMER: Use of this newsletter signifies your acceptance of this disclaimer. Note to Readers: Ensure that "Show Images & Enable Links" feature of your email program is enabled. Professional research content blog is up and running. We post new research daily. See it here: http://www.vitalstocks.com/blog/index.html Submit all comments or ideas to: webmaster@vitalstocks.com This issue sponsored by... ============================================== MICROCAP GEMS We find the movers in the micro-cap arena. Uncover companies possessing unusual promise and tremendous growth potential with our free investment newsletter. Click Here Now http://www.microcapgems.com/signup.php?ADID=vitalstocks ============================================== 1) Current Market Metrics: - NEW YORK, March 2 (Reuters) - Investors added a net $3.5 billion to U.S.-based stock funds in the week ended March 1, identical to the inflow of the prior week, TrimTabs Investment Research estimated on Thursday. Full Story/Source: http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyid=2006-03-02T213130Z_01_N02393971_RTRIDST_0_FINANCIAL-FUND-FLOWS.XML --------------------------------------------------------------------- Independent Data on Fund Flows Data As Of: 1 March 2006 - Equity Fund Inflows $2.9 Bil; Taxable Bond Fund Inflows $1.2 Bil xETFs Equity Fund Inflows $2.0 Bil; Taxable Bond Fund Inflows $1.0 Bil - Largest ETF inflows: $630 Mil to the SPDR Trust Series I; $365 Mil to the Select Sector SPDRs Financial fund; $266 Mil to the Vanguard Mid Cap Index: Viper fund; $207 Mil to the iShares MSCI Japan Index fund; $143 Mil to the Vanguard Small Cap Index: Viper fund; Source (Much more information available): http://www.amgdata.com/ ============================================== 2) Recent Research Articles - Actionable investment research and commentary, unedited, straight from the pros. (Click to read the post) 2A) (NX) - exceeded analysts' expectations in 11 out of the past 12 quarters: http://www.vitalstocks.com/blog/2006/03/nx-exceeded-analysts-expectations-in.html 2B) (ECLP) - Sales jumped 20.6%: http://www.vitalstocks.com/blog/2006/03/eclp-sales-jumped-206.html 2C) (CTRN) - aggressive growth strategy is paying off - four analysts raised their numbers: http://www.vitalstocks.com/blog/2006/03/ctrn-aggressive-growth-strategy-is.html 2D) (LFL) - strong international growth - estimates have increased 36.8% : http://www.vitalstocks.com/blog/2006/03/lfl-strong-international-growth.html 2E) (NVDA) - year-over-year growth surpassing 92% in five quarters: http://www.vitalstocks.com/blog/2006/03/nvda-year-over-year-growth-surpassing.html ============================================== 3) Viewing the Market: Financial analysts / journalists comment on the current stock market and future direction. 3A) Stock Buybacks At Record Highs; Firms Actually Reducing 'Float' BY REINHARDT KRAUSE INVESTOR'S BUSINESS DAILY Posted 2/27/2006 Flush with cash, many firms are deciding the best thing to do with it is repurchase their own shares. S&P 500 companies spent more than $325 billion on their own shares in 2005. That's a record and a 64% jump from 2004. Source: http://www.investors.com/editorial/IBDArticles.asp?artsec=16&issue=20060227 3B) Stealth Stocks Update - On any pullback I am looking to be a buyer Weekly Update for Monday, February 27, 2006. Summary of Recommendations: Stay mostly invested. Market Commentary Though February has not been a great month, it has recently managed to take out the January highs. While that may sound like a great achievement, the fact is that January ended at its highs and February has essentially been a month of testing the January lows and then making up lost ground to reach just slightly above where the market stood at the end of January. So, there hasn't really been a lot of progress in the month of February, relative to the highs of January for most sectors. However, the bulls remain very much in charge here. As I try and quantify what is happening in the stock market, I look at the market in terms of cycles, within cycles, subset trends within larger trends to help give perspective and an edge in our investing. I have pointed out before that the stock market tends to give the greatest profits between the months of October through April. The stock market bottomed in October, rallied impressively in the month of November but since then has been in a consolidating phase, until just recently. I think February completed an intermediate correction with the market now poised to climb higher in the months of March/April in line with a positive primary uptrend. However, as we enter into the month of March the market is now short-term overbought, suggesting that a potential pullback in the early days of March. We get the last revision of the GDP figures on Tuesday, which is the last day of the month. With the market short-term extended I look for some sort of a pullback for a few days and then for another upward surge to follow. Article Continued... ============================================== Time to Join the Gold Rush? Has gold peaked or does it have a long run ahead? However you view gold, you've got to have the complimentary Gold Traders Kit from Man Financial and the CBOT. Get the background you need on the best way to trade precious metals: Mini-sized Gold and Silver Futures. Get access to real-time prices and more. http://a.gklmedia.com/vtstocks/nl/127 ============================================== On any pullback I am looking to be a buyer, and a short-term correction should present another buying opportunity. In the meantime, crude oil prices have been all over the place, with oil speculators in a tug-a-war between bearish fundamentals and geopolitical concerns, whipping up one day and down the next. Tensions eased over the weekend about the possibility that terrorists could disrupt shipments from Saudi Arabia. Iran is suddenly becoming more flexible, just ahead of the Security Council meeting. Russia and Iran agreed to create a joint company that would enrich uranium in Russia for Iran, the Iranian vice president for atomic energy, Qolam-Reza Aqazadeh, said on Sunday. The accord comes a week before the United Nations' nuclear watchdog meets to decide whether to ask the Security Council to take action against the Islamic republic. Iraq is still a hotbed of discontent but it appears that calmer heads are trying to keep the country from falling into civil war. The crude oil market finished the month of February breaking down through January's lows and appears to be closing near the lows for the month, which of course is a bullish fundamental for the stock market if oil prices continue to back off in March. Crude oil fell $1.91 on Monday, to close at $61.00 a barrel. Gold, along with commodities in general, looks to have made a top. Gold is short-term overbought, with the most recent short cycle rally failing to better its prior highs, so I am recommending selling Gammon Lake Resources (GMS) in the aggressive portfolio. In our income portfolio, Alliance Capital Management (AC) has a new name and symbol. The new name is now AllianceBernstein (AB). This is still a hold in our income portfolio and is doing quite well, up 21% since our buy recommendation. We were stopped out of two positions: Hurco Companies (HURC) and US Growth Investors (GROW) with small gains. I am looking to be a buyer on the next short cycle correction and will likely have a number of recommendations next week. Courtesy: Stealth Stocks Alert http://www.stealthstocksonline.com or call 800-524-4832 Eastman Communications, Inc. is the publisher of Stealth Stocks 3C) Super-Majors Help Fuel Alternatives With Sheraz Mian Feb 28, 2006 Global demand for oil looms large over the current economic landscape, and looks to remain influential for the forseeable future. After a prolonged bull market in the oil industry, at what point are we in this group's cycle? We spoke with senior oil analyst Sheraz Mian to find out. Are large-cap integrated oil companies significantly invested in alternative energy technologies like biodiesel and coal gasification? If so, should investors consider buying shares of these companies to play a potentially broadening energy plan? While almost all of the super-majors allocate meaningful portions of their substantial R&D budgets to alternative energy, I wouldn’t call these stocks alternative energy plays. Investors will have to look elsewhere play to those markets. These companies are essentially hydrocarbon producers and will continue to be plays on the outlook for the hydrocarbon universe. Having said that, a number of non-conventional energy plays are fairly in the mainstream now, thanks in no small part to patronage from the super-majors. The liquefied natural gas (LNG) and gas-to-liquids (GtL) technologies are now widely considered viable, following research and investments by the super-majors. What is your outlook for oil prices in 2006? We believe that the critical supply-demand and geopolitical factors that have kept crude oil prices at elevated levels will remain in play this year, helping keep prices high. We are projecting crude oil prices to average $62 per barrel in 2006, up from last year’s average of about $56 per barrel. We expect prices to moderately pullback next year, averaging roughly in the high $50’s range in 2007. The underlying reasons for the continued strength in prices remain unchanged – namely, growing global demand and historically low excess production capacity. It is this absence of sufficient excess production capacity in the global energy complex that magnifies the risks/threats to the global energy supply system. By way of comparison, current global excess production capacity totals about one million barrels per day or about 1% of total global demand, almost all of which is located in Saudi Arabia. With excess capacity at such low levels, crude oil prices jump in response to real or perceived threats to the supply system. Talking about threats to the supply system, how serious do you think the current headlines about Iran are? While there is no near-term threat to global oil supplies, Iran’s latest defiance of the international community with respect to its nuclear ambitions add to fears of instability in a critical supply region. To fully appreciate Iran’s significance, consider this: Iran is a major crude oil supplier that meets about 5% of total global oil demand, a member of OPEC, a neighbor of Iraq with reportedly strong links to Iraq’s Shiite majority, and an influential player in the Persian Gulf oil supply area. Escalation of the dispute from current levels will threaten oil supplies, not just from Iran but the entire Persian Gulf region, and this is a situation that the global energy complex can ill afford. As such, we believe that the Iranian story adds to an already volatile oil market. ConocoPhillips has made some headlines over the past couple of months with some big-time acquisitions. Do you see this as one of the strongest stocks for investors looking to increase their exposure to the super-majors? ConocoPhillips (COP) has been our favorite stock among the integrated oils for quite some time, and we still like it. The market has not been very enthusiastic about its Burlington Resources (BR) acquisition, and as a result the stock has been a relative underperformer recently. But we like the deal and appreciate its long-term strategic rationale and continue to recommend the stock as a core energy holding. ConocoPhillips deserves to be treated as a super-major, but continues to trade at a significant discount to that group. We believe that as the market comes around to treating it as a super-major, its fortunes will change. Fundamentally, the company enjoys strong leverage to the U.S. refining market – the highest among the super-majors – and offers strong production growth prospects, thanks in no small part to its aggressive acquisitions in the U.S. (Burlington) and internationally (Russia’s Lukoil). We have a six-month price target of $80 on the stock. Can you tell us about some other favorites in your coverage? In addition to ConocoPhillips, I like ExxonMobil (XOM), Chevron (CVX) and Amerada Hess (AHC) in the integrated group, and Valero (VLO) and Tesoro (TSO) among the refiners. Exxon is the largest energy company in the world (in terms of market cap, production, and reserves) and serves as a bellwether for the entire group. It has the strongest balance sheet in the sector, with more cash than debt. It also has a growing dividend and an active share buyback program. Though Exxon’s growth performance has been rather patchy in the recent past, we believe that it is capable of generating faster growth than it gets credit for. Chevron has the strongest leverage to crude oil prices among its peers and is a play on our commodity-price outlook. Amerada Hess is a turnaround story, and we are optimistic about its long-term outlook. Valero is the largest independent refiner in the country, and accounts for about 12% of the total U.S. refining capacity. It is geographically diversified and operates refineries that are capable of producing environmentally compliant petroleum products (such as gasoline) from high-sulfur varieties of crude oil that sell at a discount to the premier varieties of crude. We like Tesoro for its strong position in the attractive western U.S. market, where it is the second largest refiner. Sheraz Mian is a senior analyst covering the oil industry for Zacks Equity Research. About Zacks Analyst Interviews Zacks Equity Research employs 50 stock analysts who are experts in the industries they cover. In these articles you will discover our analyst's current insights on key industries in the news along with their favorite stocks to buy and sell now. Learn More about Zacks Equity Research http://www.zacks.com/help/about_zer.php ============================================== Share this issue with a friend ============================================== 4) Feature Stock #1 – Hurco Companies, Inc. (HURC) STOCK OF THE MONTH: Feb Hurco Companies, Inc. (HURC) Market Cap – $218 million — Shares Outstanding – 6.2 million — Buy Below – $40/share Company Profile Hurco Companies, Inc., (HURC) an industrial technology company, designs and produces interactive, PC–based computer control systems and software and computerized machine tools for sale to the metal–working industry (using a global sales, service, and distribution network). Its proprietary computer control systems and software products are sold mainly as integral components of the company’s computerized machine tool products. Hurco’s core products consist of general–purpose computerized machine tools (85.5 percent of FY 05 (Oct.) net sales and service fees) for the metal–cutting industry–principally vertical machining centers). The company’s computerized machine tools are equipped with a fully integrated interactive Ultimax computer control system. Its Ultimax twin screen conversational computer control system is sold solely as a fully integrated feature of Hurco’s computerized machine tools. In 2004, Hurco introduced a new line of turning centers (lathes) designated as the TM Series. Article Continued... ============================================== 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 ============================================== The TM Series is powered by Hurco’s MAX control. Hurco also produces computer control systems and related software (3.3 percent) for press brake applications that are sold as retrofit control systems. Hurco’s Autobend computer control systems are applied to metal bending press brake machines that form parts from sheet metal and steel plate and consist of a microprocessor–based computer control and back gauge (an automated gauging system that determines where the bend will be made). In addition, Hurco produces and distributes software options, control upgrades, hardware accessories, and replacement parts related to its machine tool product lines and provides operator training and support services to its customers. Service parts accounted for 8.0 percent of net sales and service fees in FY 05, and service fees accounted for 3.2 percent. (Source: www.BusinessWeek.com). Why I Like It HURC has very little debt and has a current ratio of 2.4, which means it has $2.4 in assets for every $1 of debt.The company is selling at a very reasonable 1.5 times sales. Projection According to my numbers, this is a stock that should be selling in the high $70s to low $80s over the next three to five years. It is currently trading in the mid–to–high $30s, so HURC has a large upside potential. Place a sell stop at 25 percent below your entry price.As the stock rises, continue to raise your stop so that you are trailing the Friday close by 25 percent. Contact Information: One Technology Way • Indianapolis, IN 46268 Courtesy: Dennis Slothower’s STEALTHSTOCKS www.StealthStocksOnline.com VitalStocks.com Research Summary: Data as of: 26 Feb Price / Cash Flow Ratio is only 45.7% of the Industry Average Forward Price to Earnings Growth (PEG): Not Available Debt / Equity Ratio is 36.8% of the Industry Average Net Profit Margin is 168% of the Industry Average Return on Equity is 286.6% of the Industry Average Current P/E Ratio is 11.5% of the Industry Average ============================================== 5) Feature Stock #2 – Chevron Corp. (CVX) Originally Published 23 February 2006 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. Source: http://www.zacks.com/experts/featured/view_article.php?art_id=2403&newsletter_id=173&PHPSESSID=13f0a0145a9a755761f18248179745a1 Article Continued... ============================================== MICROCAP GEMS We find the movers in the micro-cap arena. Uncover companies possessing unusual promise and tremendous growth potential with our free investment newsletter. Click Here Now http://www.microcapgems.com/signup.php?ADID=vitalstocks ============================================== Business Description: Global Snapshot • The second-largest integrated energy company in the United States and one of the largest in the world, based on market capitalization, as of December 31, 2004. • Conducts business activities in approximately 180 countries. • More than 47,000 employees worldwide at year-end 2004, excluding service station personnel. • Capital and exploratory budget for 2005 set at $10 billion, up from $8.3 billion in 2004. Source: http://www.chevron.com/news/media/docs/chevron_fact_sheet.pdf VitalStocks.com Research Summary: Data as of: 26 Feb Price / Cash Flow Ratio is 81.2% of the Industry Average Forward Price to Earnings Growth (PEG) is approximately 1.15 Debt / Equity Ratio is 110.5% of the Industry Average Net Profit Margin is 87% of the Industry Average Return on Equity is 97.9% of the Industry Average P/E Ratio is only 67.2% of the Industry Average ============================================== 6) Additional Stocks - Worth a Further Look 6A) Smith International, Inc. (SII) Commentary from February 23 Smith International, Inc. (SII) has met or topped analysts’ earnings expectations in 12 straight quarters. Earnings per share are forecasted to grow 21.0% over the next 3-5 years. SII recently issued 2006 earnings per share guidance slightly above analysts' estimates. The consensus earnings estimate is trending higher for this Zacks #1 Rank stock. Full Analysis Smith International, Inc. is a worldwide supplier of premium products and services to the oil and gas exploration and production industry, the petrochemical industry and other industrial markets. The company operates through its four business units: M-I SWACO, Smith Technologies, Smith Services and Wilson. SII has met or exceeded analysts’ earnings expectations in 12 consecutive quarters. Earnings per share grew 19.7% over the past five years and are forecasted to grow by a slightly higher margin—21.0% over the next 3-5 years. On Jan 30, 2006, Smith International, Inc. posted fourth-quarter 2005 earnings per share of 45 cents, 7.1% higher than the Street’s estimate and 60.7% above its prior year’s period. Revenues for the quarter amounted to $1.5 billion, up from $1.2 billion achieved in the fourth quarter of 2004. For the year ended Dec 31, 2005, profits were $302.3 million versus $182.5 million achieved in 2004. Revenues for the full year of 2005 were $5.6 billion, compared to $4.4 billion reported by the company in 2004. Chairman and CEO Doug Rock stated, "Smith had a great year in 2005, but that's old news. I'm excited about the momentum we have going into 2006.” SII issued on Jan 30, 2006, full-year 2006 earnings per share guidance slightly above analysts' estimates. The company expects earnings of between $2.00 and $2.10. Improved pricing and product volumes led to its revised outlook. Analysts’ estimates for the current quarter, as well as for the second quarter of 2006, are trending higher. Forecasts for this quarter’s profits currently stand at 47 cents—4.4% higher than the consensus of 60 days ago. The consensus earnings estimate for the second quarter of 2006 increased by 6.5% over the same time period. Forecasts for full years 2006 and 2007 jumped 7.7% and 11.6%, respectively, over the past two months. On the acquisitions front, SII has acquired more than $400 million worth of proven products from niche industry players over the last three years. And given its strong balance sheet, the company continues to have the flexibility to pursue further acquisitions. The company’s return on equity is slightly above that of the industry. SII has a ROE of 20%, compared to 18% for the industry. The stock trades at a valuation of 27.2x trailing 12-month earnings and at 19.3x its current fiscal year estimated earnings. Smith International, Inc. has a current dividend yield of 0.59%. 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 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 ============================================== 6B) Weatherford International, Ltd. (WFT) Originally Published: 23 February 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 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 ============================================== 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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(OSK) - topped the consensus earnings estimate for 16 straight quarters

Oshkosh Truck Corporation (OSK) generated fiscal 2006 first-quarter earnings well above expectations, fueled by strong demand for new and rebuilt vehicles to support the war in Iraq. The company has topped the consensus earnings estimate for 16 straight quarters. Earnings per share are forecasted to grow 24.0% over the next 3-5 years. OSK has increased revenues, expanded gross margins and grown profits for the past nine years. This Zacks #1 Rank stock has a ROE of 22%, compared to 12% for the industry. Full Analysis Oshkosh Truck Corporation is a leading manufacturer and marketer of specialty trucks and truck bodies for four primary markets: defense, concrete placement, refuse hauling and fire and emergency. The company has manufacturing operations in 10 U.S. states and in Canada, the Netherlands, Sweden and Mexico. OSK has a strong history of exceeding the consensus earnings estimate, having done so for 16 consecutive quarters. Earnings per share have grown 32.6% over the past five years and are forecasted to grow 24.0% over the next 3-5 years. On Feb 2, 2006, Oshkosh Truck Corporation reported first-quarter fiscal 2006 earnings per share of 72 cents—crushing the Street's estimate by 33.3%, and soaring past its prior year's earnings of 56 cents. Revenues jumped 22.5% when compared to the first quarter of fiscal 2005. OSK's fire and emergency and defense segments fueled the company's strong results. Operating income increased 28.6% to $87.0 million. The company cited that operating income grew at a double-digit percentage in all of its business segments. OSK has increased revenues, expanded gross margins and grown profits for the past nine years. Oshkosh Truck Corporation recently increased its fiscal 2006 earnings per share guidance to between $2.55 and $2.65. The company cited strong fundamentals in end markets as the primary reason for its revised outlook. Furthermore, OSK stated that it is beginning to make important progress in turning around its commercial business. This is good news for the company considering this segment reported a decline in revenues in the last quarter. Analysts' estimates have been on the rise for this fiscal year and next. The current consensus estimate for fiscal 2006 profits currently stands at $2.87—5.5% higher than the consensus of 60 days ago. Forecasts for fiscal 2007 earnings have increased by 10.0% over the same time period. On Feb 2, 2006, the Board of Directors at Oshkosh Truck Corporation declared a quarterly dividend of 10 cents per share of common stock—up approximately 48% from the dividend paid in the preceding quarter. The company has a current dividend yield of 0.71%. OSK's return on equity is almost twice that of the industry average. OSK has a ROE of 22%, compared to 12% for the industry. 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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(PLAY) - exceeded the consensus earnings estimate every quarter

PortalPlayer, Inc. (PLAY), a Zacks #1 Rank stock, has exceeded the consensus earnings estimate every quarter since its initial public offering in November 2004. Analysts' estimates have been on the rise for this year and next. Earnings per share are forecasted to grow 21.0% over the next 3-5 years. The company has a return on equity of 25%. PLAY has a price-to-book multiple of 2.8 and a PEG ratio of 0.59. Full Analysis PortalPlayer, Inc. is a fabless semiconductor company, engaged in the design, development and marketing of platform solutions. The company develops semiconductor, firmware and software platforms for portable multimedia products such as personal media players, and secondary display enabled notebook computers and personal wireless entertainment devices. PLAY is best known as being an iPod chipmaker. PLAY has exceeded the consensus earnings estimate in five consecutive quarters by an average margin of 29.0%. The company has turned a profit each quarter since its initial public offering in November 2004. Earnings per share are forecasted to grow 21.0% over the next 3-5 years. On Jan 26, 2006, PortalPlayer, Inc. posted fourth-quarter 2005 earnings per share of 62 cents, which topped the consensus earnings estimate by an impressive 29.2%. PLAY's profits in the prior year's period amounted to 53 cents per share. Net revenue for the fourth quarter of 2005 was $78.2 million, up 74.9% from the $44.7 million reported in the fourth quarter of 2004. For the entire year, net revenue and profits were up 143.2% and 363.5%, respectively, versus 2004. Pleased by its full-year and fourth-quarter 2005 results, PLAY issued first-quarter 2006 revenue guidance above analysts' estimates. PortalPlayer, Inc. expects revenues of between $70 and $80 million, while analysts were projecting revenues of $63.9 million. The company cited that it expects 2006 to be another year of significant growth for the feature-rich segment of the personal media player market. Furthermore, PLAY expects its new PortalPlayer Preface technology to help diversify its customer and revenue base in 2006 and beyond. Analysts' estimates have been trending higher for PortalPlayer, Inc. The current consensus earnings estimates for this quarter and the second quarter of 2006 have jumped 27.3% and 21.2%, respectively, over the past 90 days. Forecasts for full-year 2006 and 2007 profits have increased 25.8% and 49.3%, respectively, over the same time period. PLAY has a price-to-book (P/B) multiple of 2.8. The stock trades at a valuation of 14.4x trailing 12-month earnings and at 12.3x its current fiscal-year estimated earnings. The company has a PEG ratio of 0.59. Management appears extremely committed to building shareholder value. PLAY has a ROE of 25%. 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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(PTSI) - turnaround confirmed

PAM Transportation (PTSI), a turnaround confirmed. Background P.A.M. Transportation Services, Inc. is an irregular route, common and contract motor carrier authorized to transport general commodities. The freight consists primarily of automotive parts, consumer goods, such as general retail store merchandise, and products from the manufacturing sector, such as heating and air conditioning units. All freight is transported as truckload quantities. Full Analysis Investors sometimes wonder why a company's stock doesn't do better after a strong earnings report. Take PAM Transportation for example. On face value, PTSI had a breakout quarter. On Feb 8, 2006, PTSI reported earnings per share for the quarter ended December 2005 of 41 cents per share, beating the year-ago performance by 156% and topping the consensus of 27 cents by 52%. Not only were earnings strong, but sales were up 10.4% and income was up 49.8%. Technical Review Despite these strong earnings, the market reaction to PTSI was muted to say the least. The stock managed only a 4% gain on Feb 8 with volume barely above normal. So what gives? Part of the answer is that investors had reason to be skeptical. The December quarter's positive earnings surprise was only the first positive surprise in the last three quarters, and only the fourth in the last thirteen quarters. Still, there are powerful reasons to like PTSI. The stock had been in a long-term downtrend since topping out at $28.17 on Jan 15, 2003. The market found bottom at $13.43 on Jun 17, 2005. By Dec 19, 2005, PTSI had closed definitively above its 200-day moving average and began its current uptrend. Last Friday the stock gapped higher into new 52-week high ground on more than twice normal volume. Technical analysis takes as a tenant of faith that all known factors about a stock are reflected in its price. Viewing PTSI's chart, it becomes evident of a company with a turn around in place. Not only did PTSI close above its 200-day moving average on Dec 19, 2005, it also closed above a long-term downtrend line that can be drawn from the highs back on Jan 2003. Now the fundamental evidence of that turnaround is beginning to be reported. This is a stock on its way higher for the time being. 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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(EVC) - met or exceeded earnings estimates in seven out of the last eight quarters

Entravision Communications Corporation (EVC) met or exceeded earnings estimates in seven out of the last eight quarters. Five different analysts raised their estimates for 2006. Over the past 30 days, estimates for 2006 increased 20% to 12 cents per share. Full Analysis Entravision Communications Corporation (EVC) is a Spanish language media company and the largest affiliate of Univision Communications Inc. (Univision), the leading Spanish language network in the U.S. The company has a diversified portfolio of television, radio, outdoor advertising, and publishing assets. Entravision owns Univision-affiliated stations in 20 of the top 50 Hispanic markets in the U.S. Entravision operates media properties in 12 of the 15 highest-density Spanish-speaking markets in the U.S. The company continues to capitalize on the significant growth of the Spanish language media and is attracting advertisers that want to tap this fast growing audience. Entravision uses a combination of local and network content in each market it serves, giving it a competitive edge. The company also employs a cross-promotion strategy to win new advertisers. The company believes that targeting the U.S. Hispanic market will translate into strong revenue growth for the foreseeable future. Entravision's audience consists primarily of Hispanics, one of the fastest-growing segments of the U.S. population and, by current U.S. Census Bureau estimates, the largest minority group in the United States. On Feb 23, 2006, Entravision reported results for the fourth quarter and the 2005 fiscal year. Net revenue for the quarter increased 7.5% to $73.2 million from $68.0 million in the year-earlier quarter. EBITDA was $24.9 million, up 12% from $22.2 million in the fourth quarter of 2004. Net income was $0.03 per share, compared to earnings per share of $0.02 in the fourth quarter of 2004. Net revenue for 2005 increased 8.6% to $305.0 million from $281.0 million in 2004. EVC met or exceeded earnings estimates in seven out of the last eight quarters. Five different analysts raised their estimates for 2006. Over the past 30 days, estimates for 2006 increased 20% to 12 cents per share. The stock is currently trading at 40.6x 2007 estimates of 19 cents per share, 2.08x the long-term growth rate of 19.50%. 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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(ECA) - operating fundamentals look exceptionally strong

Equity Research Richard R. Wolfe, CFA www.zacks.com 155 North Wacker Drive Chicago, IL 60606 March 1, 2006 Encana Corporation (ECA) OUTLOOK Encana's operating fundamentals look exceptionally strong, especially the company's industry-leading inventory of unbooked resources (27 million net $41.31 acres). Also attractive is the company's tight focus on unconventional oil and gas resources with very low dry-hole risk and long decline curves. The recent announcement of an agreement to sell off the company's assets in Ecuador assures the fulfillment of Encana's strategic realignment into a pure play on North American unconventional assets. Given our outlook for continued strength in oil and gas prices, Encana shares should outperform the broad market. Encana is the largest of the North American oil and gas independents, with market capitalization of US$36 billion (all dollar amounts in this report in US$). The company is also the largest natural gas producer in North America and as such is positioned to benefit from continued strength in US natural gas prices. Encana's production-growth prospects compare favorably to those of the bulk of its large-cap peers, a competitive advantage that owes much to the company's exclusive focus on unconventional hydrocarbon resources. The company's immense inventory of undeveloped acreage (27 million net acres) and the very low dry-hole risk associated with unconventional resource development gives Encana considerable control over its rate of growth. Encana's low-risk unconventional resources, estimated at 19 trillion cubic feet of natural gas and 900 million barrels of crude oil/liquids, add substantially to the company's asset valuation. OVERVIEW Encana Corporation (ECA), based in Calgary, Alberta, is a major oil and gas exploration and production (E&P) company formed through the 2002 merger of PanCanadian Energy Corporation and Alberta Energy Corporation. Encana is the largest natural gas producer in North America, with volume of 3.2 billion cubic feet per day (Bcf/d) in of 2005. In total, the company's production from continuing operations is about 4.2 billion cubic feet equivalent per day (Bcfe/d), comprised of 78% gas and 22% crude oil / liquid hydrocarbons. As of year-end 2005, Encana had a proved reserve base of 18.5 trillion cubic feet equivalent (Tcfe). Approximately 78% of Encana's proved reserves are comprised of natural gas, and substantially all are located in North America. Encana's continuing operations, all focused on exploitation of unconventional natural gas and crude oil resources (except for several offshore Brazil lease blocks still being actively explored), are now concentrated in western Canada and the US Rockies. In western Canada, the company divides its operations between the “Plains” region (Alberta's southern and central plains) and the “Frontier” region (deep oil sands in north-central Alberta and the Foothills Play of western Alberta / northeastern British Columbia). The company also has lesser interests in leases offshore Newfoundland and Nova Scotia. In the Rockies, Encana is a major player in the Jonah field (southwest Wyoming) and the Mamm Creek field (Piceance Basin, Colorado). Discontinued operations. In 2003, the company announced a strategic decision to make unconventional resources its exclusive focus and later that year discontinued its participation in the giant Syncrude project (surface mining of oil sands) in northern Alberta. Encana has divested its operations in the North Sea (in 2004) and in the Gulf of Mexico (in the first half of 2005). In 2004 and 2005, the company has been selling off blocks of mature oil-producing assets, primarily in Alberta. In the third quarter of 2005,Encana announced a US$1.4 billion agreement to sell its assets in Ecuador. Remaining divestiture plans, probably in 2006, involve primarily gas processing and transportation assets, including the Empress pipeline in Alberta. The company has adopted a strategic focus on the exploitation of unconventional natural gas and crude oil resources, including coalbed methane, tight sands, tight shales, and oil sands (but not surface mining of oil sands). Encana refers to these as “resource plays” to emphasize the concept of tapping a known and identified source-rock resource, in contrast to the traditional oil and gas concept of exploring for hydrocarbons in reservoir-rock traps. In pursuit of its resource-play strategy, the company has assembled an immense North American acreage inventory (approximately 27 million acres, including 8 million acres with fee-title ownership of mineral rights). By pursuing this strategy, the company hopes to take advantage of the lower-than-average reserve decline rates and low-risk drilling opportunities that have characterized unconventional resource development across the industry in recent years. The share of production volumes from these unconventional plays in Encana's overall volume mix is steadily on the rise. In 2003, the company produced roughly 55% of its total volumes from such unconventional sources as oil sands, shale gas, and coal bed methane, a percentage reached 75% in 2005. Encana's resource-play focus is capable of delivering strong and sustainable production growth. Management has identified an 7-11% annual growth rate as its long-term target. We believe that Encana can, at its option, accelerate growth by scaling up its unconventional drilling programs without exposing itself to the degree of risk associated with a big push into conventional exploration. The company's inventory of undeveloped acreage, coupled with relatively low dry-hole risk associated with unconventional resource development, makes growth scalable. If, as now appears to be the case, tight markets for natural gas warrant a larger-scale effort on Encana's part, then production could grow faster than the near-term 7-11% target. In assessing the company's future cash flow potential, the high probability of being able to replicate present unconventional production across the full extent of Encana's undeveloped acreage deserves to be factored in, in favor of the company. Encana has estimated its unbooked resources at 19.0 Tcf of natural gas and 900 million barrels of crude oil/liquids. We have included these resources – reduced by a probability factor – in our cash flow estimates, even though they are not proved reserves. They also appear in our net asset value calculation (“Valuation” section, below). To sustain growth (and to compensate for rapidly escalating drilling and oilfield services costs), Encana will spend nearly $6.0 billion on upstream activities in 2006. Approximately 75% of the capital outlays will target resource plays and only about 10% of the total will go toward conventional exploration activities. In 2006, we estimate cash flow at $6-7 billion, an increase of 23% over 2004 (on a per-share basis). Production growth should be the primary factor propelling growth in 2006. Escalating operating costs throughout the oil and gas industry can be expected to offset a portion of the benefit of higher prices and/or production. In Encana's case, operating costs per unit of production are expected to rise about 15% annually. In addition to maintaining stable production growth, management appears committed to supporting share value via an ambitious stock buyback program (paid for out of proceeds of the company's $5.0 billion in asset divestitures). Encana recently announced the renewal of its expanded program, targeting 10% of shares outstanding (vs. 5% previously). Over the last four quarters, buybacks totaled approximately $2.7 billion, substantially exceeding the $1.0 billion total for fiscal 2004. Encana is conservatively capitalized, with a ratio of total debt to total capital of 32%, and we forecast a reduction in this ratio to 27% during 2006. We believe oil and natural gas markets will remain tight, with supply lagging slightly behind demand, and with only moderate switching to alternative fuels. Developments during 2005 have caused us to extend our expectations for peak oil and gas prices. In particular, the impact of Hurricanes Katrina and Rita has driven US natural gas to unprecedented heights. Regarding natural gas, in recent years, North American markets have tightened amid a scarcity of new supplies, helping US and Canadian exploration and production companies to a third successive year of strong profit growth in 2005. In 2006, we look for continued profit growth, although slower in pace. In 2007, we see flat-to-lower earnings due to the long-expected settling of product pricing toward baseline levels. In 2008, earnings should rebound modestly as the industry aligns costs with a more moderate price regime. After 2008, the importation of liquefied natural gas (LNG) could reach a magnitude large enough to offset a modest but growing portion of the domestic supply shortfall. That should begin to put some downward pressure on natural gas prices, but it is more than three years in the future. Our favorable near-term picture stems from an endemic US natural gas supply shortfall, one that the nation cannot hope to offset by piping new supplies down from Canada (averaging 15% of US supply in recent years). In both 2003 and 2004, there was a 2.5% yearly drop in North American production. Responding to the production decline, the industry has put approximately 500 more drilling rigs into service in the last two years, bringing the US natural gas rig count to 1,322 as of February 24, 2006. In 2005, North American production may stabilize, but our estimates indicate another 2.5% decline, despite the heightened drilling activity. (A portion of the anticipated decline is attributable to hurricane damage.) In the event of a colder-than-normal winter, the possibility of a US gas crunch would set in motion a sequence of events that could radically impact natural gas prices. Diminished production capacity implies that a heavier-than-normal storage draw now has the potential to outstrip producers' delivery capabilities. This would cause storage volumes to dwindle below levels deemed adequate to ride out the heating season. Perceiving this, energy traders would demand more and more for natural gas. Post-hurricane prices on the New York Mercantile Exchange (NYMEX) of $12 to $14 per thousand cubic feet (Mcf) give a hint of the upward potential. At first, energy markets will be self-correcting. As natural gas becomes prohibitively expensive vs. residual/heating oil, buyers will switch fuels. Most industrial users (40% of US gas consumption) have dual-fuel capability, as do the larger commercial enterprises (15% of US consumption). Even the utilities themselves or their independent suppliers of electric generation (another 10% of consumption) could shift to oil for their peak-capacity requirements. But the market's self-correcting capacity has its limits. Natural gas, trading between $6 and $8 per Mcf before the recent hurricanes, briefly reached $12 per Mcf in the cold winter months of early 2003. The supply-demand disparity that triggered those price highs has only worsened since, so the upward potential keeps growing. This winter, record warm weather in January has taken the pressure off the US natural gas market. Prices have moderated accordingly, declining from a post-hurricane high of $15.78 per Mcf to trade in recent days in the $6.50 -$8.00 per Mcf range. Prices at these levels during a warm winter would have been out of the question in past years. As for oil, today's historic-high crude oil prices, though in part stemming from political pressures, are also the result of fundamental supply and demand conditions. Burgeoning oil consumption, especially in China and India, may have slowed its rate of expansion in recent months but shows no sign of leveling off. The spurt of consumption growth is running up against the short-term constraints on OPEC's ability to boost supply. Oil prices are still expected to settle down and by 2008 may possibly dip below $40 per barrel for benchmark West Texas Intermediate light crude oil (WTI), but an extensive, long-term switch to oil from natural gas for heating, electricity generation and industrial processes will be constrained by tight worldwide oil supplies and will take place, if at all, over the course of many months, if not years. INDUSTRY POSITION Encana is the largest North American natural gas producer among independent oil and gas companies, and the company's gas volume of more than three billion cubic feet per day places it behind only BP and ExxonMobil. With natural gas comprising roughly two-thirds of the company's annual volumes, Encana is leveraged to the strong fundamentals of the North American natural gas market. Management's decision to divest all international operations (and mature North American operations) to focus on unconventional oil and gas development sets it apart from other large-cap independent companies. In North America, where conventional opportunities are on the wane, unconventional oil plays, especially the Alberta oil sands, have been the source of the bulk of oil reserve additions over the last decade, and unconventional natural gas plays, including coalbed methane and tight sands/shales, have recently emerged as the leading source of new natural gas supplies. Encana has the acreage, the track record, and the expertise to economically develop such resources, putting it in a strong position to capitalize on this trend. RECENT NEWS On Feb 15, 2006, ECA released fourth-quarter and full-year 2005 results. On an adjusted basis, earnings and cash flow exceeded expectations in the fourth quarter, primarily as a result of record high prices for natural gas (EnCana realized price of US$10.29 per thousand cubic feet). For the full year, adjusted discretionary cash flow from continuing operations of US$6.1 billion / US$6.89 per share exceeded our estimate by 4.9%. In 2006, management now plans a more modest capital expenditure program (approx. US$6.0 billion), citing accelerating unit operating costs (up 15% in 2005). ECA internal cash flow of US$6-7 billion, combined with asset divestiture proceeds (approx. US$3.0 billion), should enable the company to boost stock buybacks. ECA has 93% of 2006 natural gas production hedged at an average price of US$7.30 per thousand cubic feet, giving a high certainty level to forecasted cash flow. VALUATION The table below shows our derivation of Encana net asset value per share. We include year-end 2004 proved reserves, management's updated estimates of unbooked resources (discounted by our own probability factor), and proceeds from divestitures completed in 2005 or in progress. We have updated our crude oil and natural gas pricing assumptions to reflect the prices paid in recent acquisitions. Our estimate values the company at $63.29 per share and accordingly we have set a $63.25 target price. RISKS A sustained pullback in oil and/or natural gas prices would directly impact Encana's revenues, and, because of the company's focus on unconventional resources, would have a secondary impact on the feasibility of operations in the company's unconventional reserve base. Encana's sales of heavy crude oil are subject to pipeline and refinery capacity, and price discounting of heavy crude during periods of transportation and processing constraints – in effect, a market preference for light crude --adversely impacts the company's results in comparison to competing producers of light crude oil. Encana's deep oil sands technology, though proven, is still, in our view, vulnerable to potential implementation delays. Management's ability to deliver on its guidance as to production growth is a key element underpinning valuation; therefore, a pattern of sub-par growth would likely have a substantial impact on the company's stock. INSIDER TRADING AND OWNERSHIP Institutional shareholders own 52% of the company's outstanding shares. Major institutional shareholders include: Fidelity Management & Research Corporation (owns 8.8% of the shares), Barclay's Bank Plc (3.8%), and Wellington Management Company (2.5%). Institutional shareholders have been net buyers of the stock over the last quarter, hiking their combined stake by 14%. The short ratio is only 1.01 days. DISCLOSURES The analysts contributing to this report do not hold any shares of ECA. Zacks EPS and revenue forecasts are not consensus forecasts. Additionally, the analysts contributing to this report certify that the views expressed herein accurately reflect the analysts' personal views as to the subject securities and issuers. Zacks certifies that no part of the analysts' compensation was, is, or will be, directly or indirectly, related to the specific recommendation or views expressed by the analyst in the report. Additional information on the securities mentioned in this report is available upon request. This report is based on data obtained from sources we believe to be reliable, but is not guaranteed as to accuracy and does not purport to be complete. Because of individual objectives, the report should not be construed as advice designed to meet the particular investment needs of any investor. Any opinions expressed herein are subject to change. This report is not to be construed as an offer or the solicitation of an offer to buy or sell the securities herein mentioned. Zacks or its officers, employees or customers may have a position long or short in the securities mentioned and buy or sell the securities from time to time. Zacks uses the following rating system for the securities it covers. Buy-Zacks expects that the subject company will outperform the broader U.S. equity market over the next one to two quarters. Hold-Zacks expects that the company will perform in line with the broader U.S. equity market over the next one to two quarters. Sell- Zacks expects the company will under perform the broader U.S. Equity market over the next one to two quarters. The current distribution of Zacks Ratings is as follows on the 1135 companies covered: Buy-18.9%, Hold-75.9%, Sell – 5.0%. Data is as of midnight on the business day immediately prior to this publication. About Zacks Bull of the Day The Bull of the Day is one of the latest Buy recommendations from Zacks Equity Research. Utilizing a combination of quantitative models and the insight of experienced equity analysts, Zacks Equity Research identifies the stocks most likely to outperform the S&P 500 over the next six months. Learn More about Zacks Equity Research

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James River Coal (JRCC) - Massey Energy (MEE)

Bill Martin and his team, from the FindProfit newsletter, believe that both James River Coal and Massey Energy are undervalued and they are going to hold onto these names. Read these experts' analysis of as well as updates on both companies and discover why their share prices are moving in opposite directions. Also, receive more information on the current valuation of both holdings. Commentary from March 1 Shares of coal miners James River Coal (JRCC) and Massey Energy (MEE) are moving in opposite directions this morning, as the former said it would consider selling itself and the latter warned of a weak first-quarter performance. On the positive side, shares of JRCC have gapped more than 8% higher in early trading after the company announced that it has retained Morgan Stanley to pursue "strategic alternatives," including a possible sale. The announcement comes three weeks after Pirate Capital, an activist hedge fund and JRCC's largest shareholder, publicly scolded JRCC management and said the company should be put on the block. JRCC's up-for-sale announcement came as the company not only reported fourth-quarter results, but also as it said that it has agreed to acquire coal reserves and a rail loading facility in Indiana for $9 million in cash. The deal will add 15.8 million tons of underground reserves and 750K tons of surface reserves. Meanwhile, for Q4, JRCC posted a net loss of -$9.4 million, or -60 cents per share, compared to -$5.8 million, or -42 cents per share, a year earlier. Coal sales, however, rose, totaling $117.9 million, up from $75.4 million. Guidance for 2006 remain unchanged (except for a small uptick in its production outlook), meaning that JRCC should push towards profitability as the year progresses. On the flip side of the news, MEE said after the bell last night that a fire at a West Virginia mine, weak longwall performance, and a shortfall in production from other mines would hurt first-quarter results. The stock is down almost -6% in early trading due to the news. MEE's near-term problems mean that the company will see cash costs come in 5% to 10% more than expected for 2006. Likewise, the company said that average price per ton realized will be $47 to $48, down from an earlier projection of $50. MEE now sees shipments of 44 million to 47 million tons for the year, compared to a previous forecast of 50 million tons. "We expect a return to more normalized productivity and costs as the year progresses," said Don Blankenship, MEE chairman and CEO. "However, these issues will have a significant and negative impact on our first-quarter results." Bottom Line: At this point, Bill Martin and his team are going to hold tight onto their JRCC and MEE holdings, as both companies are experiencing production cost problems, but both companies remain undervalued. Looking at JRCC, the stock has been dealing with an overhang due to sales by Harbinger Capital, the hedge fund that was once its largest shareholder. These sales should be complete or nearly complete, removing that overhang. Martin and his team continue to believe that there is value to be unlocked at JRCC, that the company remains an attractive takeover target, and that based on 2007 forecasts it remains one of the cheapest names in the space. As for MEE, Martin and his team are certainly disappointed in the guidance news, but they are not surprised. The underlying value of the company is still intact, but management has been mixed. As Martin and his team recently wrote in one of their Biweekly reports, MEE's management will either have to figure out how to unlock value soon, or they will be forced out and new management will be brought in that can. Whether a sale of JRCC kicks off a consolidation phase in the industry remains to be seen. Martin and his team believe, however, that both JRCC and MEE are undervalued at these levels, and as they said earlier, they are going to hold onto the names. This article highlights the commentary of Bill Martin for the Zacks.com audience. Bill Martin provides insightful analysis, market commentary, and favorite recommendations on a timely basis in "FindProfit" newsletter. Try it free for 30 days and see if you can improve your investment performance. Learn more about "FindProfit" 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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Buy on FormFactor, Inc. (FORM) - Semiconductor Companies Still Hopeful

Semiconductor Companies Still Hopeful by Ken Nagy Mar 06, 2006 Senior semiconductor analyst Ken Nagy sat down with us recently to discuss developments in the semiconductor industry. The last time we spoke, the group was still in the midst of an up-cycle. How much is left in a run-up on semiconductor stocks, and what's the story behind it? At what point are we in the semiconductor up-cycle, in your opinion? We hit a trough point in the first quarter of 2005. Since then, every quarter has picked up. If you look at the utilization rates of the foundries (where the physical chips are actually made), they have returned from the 60-70% utilization rate range to the 90-100% range. This has been accomplished with virtually all the growth coming from consumer electronics. In 2006, we expect corporate IT departments to pick up their spending by approximately 7-9%. We expect consumer electronics to continue its growth with energy prices the real wildcard that could curb spending. What are the main growth drivers in this space? The Semiconductor Industry Association (SIA) released its annual forecast for 2005-2008, which, by the way, has record 2005 sales of $227 billion rising 8% to $245 billion in 2006. The forecast projects that sales will grow at a compound annual growth rate of 10% to $309 billion in 2008. According to the SIA, expected areas of application strength include PCs up 10%, cell phones up 13%, digital cameras up 9%, digital TVs up 52% and MP3 players up 52%. Is there still a lot of consolidation happening in this industry? There has not been a lot in terms of the numbers of events, but the mergers that have occurred have virtually doubled the sizes of firms. That kind of acquisition can take several quarters to see tangible results. I still see a lot of cash on the balance sheet of several companies, which makes me think there are more on the way. What are your top Buy recommendations at this time? Currently, I have a Buy on FormFactor, Inc. (FORM). I think the investing public forgot about this one while they built a new plant to keep up with demand. FormFactor is the market leader in advanced wafer probe cards used to test semiconductor wafers during the manufacturing process. The industry is continuing its march towards finer geometries. New semiconductor fabrication plants have been adding 300mm capabilities. These new production fabrication lines typically begin with memory applications such as DRAM, which require less complex processes. As the fab lines mature, some of the capacity is gradually shifted to the fabrication of logic ICs. Furthermore, older 200mm plants have begun to ramp production at smaller design geometries or the sub-110nm segment. Manufacturers are required to purchase a new suite of probe cards during any of these production line transitions. As a result, order momentum continued through the fourth quarter, with bookings rising to an all-time high for the company. The company has actually been capacity constrained for the past four quarters. A new plant has begun to ramp production, as 75% of the workforce has been trained and certified. Therefore, the company is no longer capacity constrained. The new plant should almost double total capacity by the end of 2005. In the interim, FORM has to absorb start-up costs that are impacting margins. . As the new plant starts running at a higher capacity level and closedown costs work themselves through the next two quarters, we expect margins to expand. We anticipate that expectations will continue to rise in conjunction with additional available capacity. We continue to rate shares of FORM a Buy. Are there any Sells you'd care to mention? Well, I'd like to discuss International Rectifier (IRF) a moment, but it's not a Sell, it's a Hold. IRF is an OEM of power semiconductors that control, condition or convert electrical power in a wide range of end-user applications. Earlier in the year the industry was wrestling with an extended period of excess inventories when IRF managed its capacity too tightly. In the June quarter, the company reassessed its need to accelerate capacity additions to meet increasing demands for Focus products. Timing was off in starting IRF's new fab, which didn't allow the company to take advantage of the strong demand in September. We see a potential ramification of attempting to increase the revenue quality and associated margins, while discarding active product lines. Though IRF expects to displace these revenue streams with higher-margin ones, the fall in revenue due to divestments could be viewed negatively in the investment marketplace. Legacy commodity products remain a drag on margins. In the last quarter, these products comprised 15% of revenue and generated gross margins in the high 20% area, much lower than the corporate average. Management has no plans to divest this business, stating that margins are still higher than competitors. Finally, please give us your outlook for 2006 in the semiconductor space. The fundamental shift in the semiconductor industry from corporate IT to consumer demand continues. This shift will continue in the years ahead, as consumers all over the world are captivated by the richness and portability of digital media. 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. The changing nature of customers will affect every aspect of the business, from product design to marketing to demand forecasting. If this is the year corporate IT does finally return to form, it could be a great year in the semiconductor space. Ken Nagy is a senior Zacks analyst covering the semiconductor industry. Courtesy: http://www.zacks.com/newsroom/commentary/index.php?id=2722

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(GVA) - record fourth-quarter and full-year 2005 results

Granite Construction Incorporated (GVA) recently reported record fourth-quarter and full-year 2005 results. GVA has increased revenues for the past nine years. This Zacks #1 Rank stock has a ROE of 14%, compared to 7% for the industry. The company has a five-year average dividend yield of 1.6%. Full Analysis Granite Construction Incorporated is the parent company of Granite Construction Company, one of the nation's largest heavy civil contractors and construction materials producers. GVA serves both public and private sector clients. Within the public sector, the company primarily concentrates on infrastructure projects, including the construction of roads, highways, bridges, dams, tunnels, canals, mass transit facilities and airports. Within the private sector, it performs site preparation services for buildings, plants, subdivisions and other facilities. GVA has met or exceeded the consensus earnings estimate in six of the past seven quarters. In those quarters in which it beat the Street, it did so by an average margin of 34.9%. Earnings per share are forecasted to grow 12.3% over the next 3-5 years. On Feb 15, 2006, Granite Construction Company reported very impressive results for the fourth quarter of 2005. The company posted earnings per share of 86 cents—50.9% better than the consensus earnings estimate. GVA's earnings in fourth quarter of 2004 were 47 cents per share. Operating income jumped to $55.8 million compared to $17.2 million achieved in the prior year's period. Revenues totaled a record $679.6 million. For the entire year, operating income increased $51.3 million to $134.9 million. Granite Construction Company posted revenues of $2.6 billion versus $2.1 billion achieved in 2004. Profits rose an impressive 45.9%. The company reported that its backlog at the end of 2005 totaled $2.3 billion. GVA was recently awarded such large projects as a highway reconstruction project in California for $62.6 million and a joint venture highway reconstruction project in Utah for $182.9 million, of which Granite's portion amounts to $137.1 million. Furthermore, the company stated that given current market conditions, it is optimistic that the division's operating performance in 2006 has the potential to be similar to its record 2005 results. GVA has increased revenues for the past nine years. Analysts' estimates have been trending higher for Granite Construction Company. The current consensus estimates for 2006 and 2007 have increased by 20.0% and 15.4%, respectively, over the past 30 days. GVA has a current dividend yield of 0.85% and a five-year average dividend yield of 1.6%. The company's return on equity is twice that of the industry average. Granite Construction Company has a ROE of 14%, compared to 7% for the industry. 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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(RBC) - exceeded consensus earnings the past four quarters

By posting very impressive fourth-quarter 2005 profits, along with declaring its 183rd consecutive dividend, REGAL-BELOIT CORPORATION was one of four Growth & Income Zacks Rank Buy Stocks featured last week. Last Week's Growth & Income Zacks Rank Buy Stocks REGAL-BELOIT CORPORATION (RBC) has exceeded the consensus earnings estimate for the past four quarters. Fourth-quarter 2005 profits for this Zacks #1 Rank stock nearly tripled when compared to the prior year's period. On Feb 8, 2006, RBC issued first-quarter 2006 earnings per share guidance above analysts' expectations. The company recently declared its 183rd consecutive dividend. RBC is currently yielding 1.3% and has a five-year average dividend yield of 2.2%. Read the full analysis. Quanex Corporation (NX) has exceeded analysts' expectations in 11 out of the past 12 quarters, including the past six in a row. On Feb 23, 2006, NX not only crushed the Street's estimate for fiscal 2006 first-quarter earnings, but also increased its quarterly cash dividend by 16.1%. The company is currently yielding 0.96% and has a five-year average dividend yield of 1.8%. Read the full analysis. TXU Corp. (TXU) reported considerably improved fourth-quarter and full-year 2005 results in early February. The company completed a three-phase restructuring program and has immediately begun implementation of its extensive revised strategies. On Feb 16, 2006, TXU declared a regular quarterly dividend of 41.25 cents per share of common stock. The company has a current dividend yield of 3.2%. Read the full analysis. Granite Construction Incorporated (GVA) recently reported record fourth-quarter and full-year 2005 results. GVA has increased revenues for the past nine years. This Zacks #1 Rank stock has a ROE of 14%, compared to 7% for the industry. The company has a five-year average dividend yield of 1.6%. Read the full analysis. Updates to Growth & Income Zacks Rank Buy Stocks On Feb 27, 2006, Administaff, Inc. upped its quarterly dividend by 2 cents to 9 cents a share. Merrill Lynch & Co. stated that it will buy back as much as $6 billion of its outstanding stock. The Board of Directors at Smith International, Inc. approved a 33% increase in its quarterly cash dividend to 8 cents per share on Mar 1, 2006. 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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(WIRE) - latest quarter 275% above expectations

Encore Wire Corporation (WIRE) has exceeded earnings estimates in four out of the past five quarters, with the latest quarter coming in 275% above expectations. Over the past 30 days, estimates for 2006 have increased 26.5% to $1.91 per share. Last Week's Zacks Rank Growth Buys Encore Wireless Corporation (WIRE) has exceeded earnings estimates in four out of the past five quarters, with the latest quarter coming in 275% above expectations. Over the past 30 days, estimates for 2006 have increased 26.5% to $1.91 per share. Citi Trends' (CTRN) aggressive growth strategy is paying off. Over the past 30 days, estimates have increased 5.8% to $1.10 per share, with four analysts raising their numbers. The stock is currently trading at 34.9x 2007 estimates of $1.24 per share, compared to the company's long-term growth rate of 20.60%. NVIDIA Corporation (NVDA) has exceeded earnings estimates for six consecutive quarters, with year-over-year growth surpassing 92% in five of those quarters. Nine different analysts raised their estimates for fiscal 2007. Over the past 90 days, fiscal 2007 estimates have soared 25.5% to $2.36 per share. Lan Airlines S.A. (LFL) is experiencing strong international growth. Over the past 60 days, 2006 estimates have increased 36.8% to $2.08 per share. Despite the stock's strong move over the past year, it is still attractively valued at 19.6x 2006 estimates. Updates to Growth Zacks Rank Buy Stocks Zumiez Inc.'s (ZUMZ) stock got a boost this week after the company announced that total net sales for the four-week period ended February 25, 2006 increased 52.9% to $14.4 million, compared to $9.4 million for the four-week period ended February 26, 2005. The company's comparable store sales increased 28.0% for the past month, versus a comparable store sales increase of 10.3% in the year ago period. 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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