(VMC) - upped its earnings guidance for the first quarter and full year of 2006

Vulcan Materials Company (VMC), a Zacks #1 Rank stock, recently upped its earnings guidance for the first quarter and full year of 2006. Earnings per share are forecasted to grow 25.0% over the next 3-5 years. In mid-February, the Board of Directors at VMC approved an increase in the company's quarterly dividend by 27.6% to 37 cents per share. The company has a current dividend yield of 1.6%. Full Analysis Vulcan Materials Company engages in the production, distribution and sale of construction aggregates and other construction materials and related services in the United States and Mexico. The company's customers include heavy construction and paving contractors, residential and commercial building contractors, concrete products manufacturers, state, county, and municipal governments and railroads. On Jan 31, VMC announced fourth-quarter earnings per share of 86 cents—topping analysts' expectations by 8.9%. The company's profits in the prior period amounted to 54 cents per share. Net sales jumped 24.4% to $681 million. The increase was fueled by improved prices, record aggregates shipments and more favorable weather conditions in certain key markets. For the entire year, net earnings and net sales increased 35.3% and 18.2%, respectively, when compared to 2004. All major product lines reported higher revenues. Cash flows from operating activities amounted to $473 million, which the company used to invest in internal capital projects and to acquire 11 aggregates operations and five asphalt plants in four states. While VMC's earnings per share grew 7.0% over the past five years, they are expected to grow by a much larger margin going forward—25.0% over the next 3-5 years. On Mar 16, 2006, VMC raised its first-quarter and full-year 2006 earnings per share guidance. The company now projects first-quarter profits of between 50 cents and 60 cents per share, compared to its prior outlook of between 20 cents and 35 cents per share. Full-year earnings are now forecasted to be between $4.25 and $4.50 per share, versus its previous guidance of between $3.85 and $4.15 per share. The company's optimistic outlook is due to higher pricing and stronger shipments for all major product lines. Analysts reacted to VMC's revised guidance by upping their estimates. The consensus earnings estimate for the first quarter of 2006 has increased 62.9% to 57 cents per share over the past 30 days. Forecasts for full-year 2006 profits have risen 7.1% over the same time period. The Board of Directors at VMC recently declared a quarterly dividend of 37 cents per common share of stock. This marked a 27.6% increase over its 2005 quarterly dividends. The company is currently yielding 1.6% and has a five-year average dividend yield of 2.1%. Furthermore, the company bought back 1,580,300 shares during the fourth quarter and 3,588,738 shares year to date. The Board also authorized the repurchase of an additional 5,327,650 shares. The company's return on equity is above that of the industry average-16% compared to 13%. 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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(ANDE) - looking for a way to profit from alternative fuels, consider The Andersons, Inc.

If you're looking for a way to profit from alternative fuels, consider The Andersons, Inc. (ANDE). Background The Andersons, Inc. is a diversified company operating in three segments. The Agriculture Group engages in grain merchandising, operates grain elevator facilities, distributes wholesale agricultural fertilizer and operates retail farm centers. The Processing and Manufacturing Group includes the processing of lawn and corn-cob based products; the purchase, sale, repair and leasing of railcars; and the operation of automotive service centers. Full Analysis If you're looking for a way to profit from alternative fuels, consider The Andersons. On Feb 23, the company announced that it was building the largest dry mill ethanol plant east of the Mississippi in a joint venture that The Andersons will manage. Earlier in the month, on Feb 8, the company announced earnings for the Dec 2005 quarter of $1.98 per share versus $1.09 last year, up 81%. The EPS were also 29% above the consensus estimate of $1.53. Sales grew 48% to $384 million and income was up 1,433% to $15.34 million. Technical Review Take a well-managed company like The Andersons and put it in a hot sector like alternative fuel. What are you likely to find? A chart with no logical entry point, which is scary to non-Momentum traders. Technically, ANDE has been in an uptrend for more than six years now, ever since it bottomed out in March 2000. But things really started to get interesting when the stock took out the old resistance at $60 per share on Mar 14, 2006. Since then, the stock has moved 47% higher in less than a month. Given the extreme price acceleration, why would a Momentum trader feel comfortable in buying ANDE at these levels? A couple of reasons. First, ANDE made a 52-week high on Wednesday (actually at least a 10-year high, as far back as my charts go). New highs are great because it means that there is no overhead resistance. Of course, the lack of overhead resistance doesn't mean a free ride up, but it does make further gains easier. More importantly, notice the extremely heavy volume on the acceleration. This is proof that interest is very high in ANDE, even while its making new highs. And finally, of course, ANDE is a Zacks #1 Rank stock, a rating held by only 5% of followed stocks. Buying after an extreme move up can be scary, but a Zacks #1 Rank stock making 52-week highs on very heavy volume? That's a stock likely to go higher yet. 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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(JAKK) - topped analysts' estimates in five of the past six quarters

JAKKS Pacific, Inc. (JAKK), a Zacks #1 Rank stock, has topped analysts' earnings estimates in five of the past six quarters, most recently by 8.2%. Net sales jumped 15.2% in 2005. The company should continue to benefit from new products and line extensions in 2006. JAKK has a price-to-book (P/B) multiple of 1.4 and a return on equity of 14%. Full Analysis JAKKS Pacific, Inc. designs, develops, produces and markets toys, leisure products and writing instruments for children and adults around the world. The company sells its products to toy and mass-market retail chain stores, department stores, office supply stores, drug and grocery store chains, club stores, toy specialty stores and wholesalers in the United States, Europe, Australia, Canada, Latin America and Asia. JAKK has exceeded analysts' earnings expectations in five of the past six quarters by an average margin of 23.5%. The company's earnings per share are projected to grow 11.5% over the next 3-5 years. On Feb 14, JAKK reported earnings per share of 53 cents, which beat the Street's estimate by 8.2% and surpassed its prior year's profits by 17.8%. Net sales were down from $184.8 million to $166.3 million. For the entire year, however, net sales rose 15.2% to $661.5 million, from $574.3 million in 2004. Profits soared 45.6% to $63.5 million, or $2.07 per diluted share, compared to $43.6 million, or $1.49 per share last year. The company's success can be attributed to its brand management skills, the strong performance of acquired lines, its ability to consistently expand and reinvent its diverse portfolio of licensed and non-licensed products and its continued strong relations with licensors and retailers. JAKK increased revenues for the past nine years. The company is well-positioned for 2006. New products and line extensions should be released during the year. Furthermore, the company recently completed its acquisition of Creative Designs International, a leading manufacturer of girls' dress-up and role-play toys. JAKK expects to increase net sales to approximately $825 million in 2006, with net income of $82 million, or $2.63 per share. Analysts have grown more optimistic about 2006 as well. The consensus earnings estimate for 2006 currently stands at $2.31. This represents a 13.2% increase when compared to the consensus of 60 days ago, and reflects upward adjustments by four analysts covering the stock. JAKK is currently trading at a highly discounted valuation. The company has a price-to-book (P/B) multiple of 1.4. The stock trades at a valuation of 11.8x trailing 12-month earnings and at 11.8x its current fiscal year estimated earnings. While the industry's return on equity is currently a negative 7%, JAKK has stood out from its peers with a positive ROE of 14%. 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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(BRNC) - exceeded earnings in two quarters by an average of 25%

Bronco Drilling Company, Inc. (BRNC) is in good financial shape, especially after recently completing an equity offering of 3.45 million common shares, netting proceeds of about $36 million. In the two quarters the company has been public, it has exceeded earnings estimates both times by an average margin of 25%. Three different analysts raised their numbers for this year. 2006 estimates have been trending upward. Over the past 60 days, they have increased 10.6% to $2.20 per share. Full Analysis Bronco Drilling Company, Inc. (BRNC) provides contract land drilling services to oil and natural gas exploration and production companies in the United States. As of December 31, 2005, it owned a fleet of 64 land drilling rigs in Oklahoma, Texas, North Dakota, and Colorado. BRNC reported a fourth-quarter profit, reversing a year-ago loss, aided by sharply higher revenue as the company operated more rigs. For the quarter ended Dec. 31, 2005, Bronco reported net income of $6.8 million, or 31 cents per share, versus a prior-year net loss of $1 million. Revenue rose more than fourfold to $39 million from $8.7 million in the prior-year period. Analysts had expected 23 cents per share. Average operating rigs in the quarter rose to 28 from 15 rigs in the third quarter, lifted by the acquisitions of Thomas Drilling and Eagle Drilling, and the refurbishment of one of the company's inventoried rigs. BRNC is in good financial shape, especially after recently completing an equity offering of 3.45 million common shares, netting proceeds of about $36 million. The company has said that it will use the money to repay debt on its revolving credit facility. The company could also pursue additional rig acquisition opportunities, which in the past has been a crucial part of the growth strategy. In the two quarters the company has been public, it has exceeded earnings estimates both times by an average margin of 25%. Three different analysts raised their numbers for this year. 2006 estimates have been trending upward. Over the past 60 days, they have increased 10.6% to $2.20 per share. Despite the stock being up 19% year-to-date, it is still attractively valued. BRNC is trading at 8.9x next year's estimates of $3.16 per share, significantly below the long-term growth rate of 55%, giving the stock a PEG ratio of 0.16. Downside risk in the shares is limited by the extremely low valuation. 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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(HZO) - Analysts' earnings estimates have been trending higher for both fiscal 2006 and fiscal 2007

Marinemax, Inc. (HZO), a Zacks #1 Rank stock, raised its fiscal 2006 earnings per share guidance back in mid-January. The company's revised outlook was fueled by its completed acquisition of the Port Arrowhead Group. Furthermore, HZO announced the increase of its credit capacity. Analysts' earnings estimates have been trending higher for both fiscal 2006 and fiscal 2007. The company has a price-to-book (P/B) multiple of 2.1. Full Analysis Marinemax sells new and used recreational boats and related marine products. The company also arranges related boat financing, insurance and extended service contracts, provides maintenance, repair and storage services and offers boat and yacht brokerage services. HZO has over 77 retail locations in 19 states. On Jan 26, HZO announced its financial results for the first quarter of fiscal 2006. Revenues were down slightly to $181.2 million, compared with $184.2 million for the comparable quarter last year. Profits also decreased. The company's numbers suffered primarily due to the impact of Hurricane Wilma. Indirect costs associated with inefficiencies, lost productivity and downtime all took their toll on HZO. The company cited that sales in the first quarter are typically driven the greatest by its Florida region—which was affected by the hurricanes. Given that revenues were basically flat exhibits HZO's strength. The company's completed purchase of the Port Arrowhead Group, a large Midwest-based retailer, will offer it additional geographic reach and synergies. Port Arrowhead and its related companies generated more than $70 million in revenues for fiscal 2004. As a result of the acquisition, HZO raised its fiscal 2006 guidance. The company now expects earnings to be between $1.89 and $2.01 per share, versus its previous forecast of $1.85 to $1.95 per share. HZO followed up its purchase of the Port Arrowhead Group by acquiring a service facility and marina, known as Great American Marine. The company will own and operate the service portion, while Brunswick Corporation (BC) will own the marina. HZO stands to benefit going forward by this expansion of its service capabilities on Florida's West Coast. On Feb 15, HZO announced the increase of its credit capacity to $385 million. The company stated that the expansion and extension of its borrowing abilities is an important component of its continued growth strategy. Analysts have also grown optimistic about the company's future. The consensus earnings estimate for next quarter currently stands at 93 cents—up 10.7% from the consensus of 90 days ago. Profit forecasts for fiscal 2006 and fiscal 2007 have jumped 6.7% and 8.5%, respectively, over the same time period. HZO is currently trading at a discounted valuation. The company has a price-to-book (P/B) multiple of 2.1. The stock trades at a valuation of 18.8x trailing 12-month earnings and at 16.7x its current fiscal year estimated earnings. The company's return on equity is slightly below the industry average—12% compared to 13%. 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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(GDW) - topped analysts' expectations for eight consecutive quarters

Golden West Financial Corporation (GDW) generated record earnings, deposits and loan originations in 2005. In doing so, GDW achieved its 9th consecutive year of profit growth. The company also has an impressive streak of earnings surprises, having topped analysts' expectations for eight consecutive quarters. Full Analysis Golden West Financial, a savings and loan company, operates as the holding company for World Savings Bank, FSB. Through its subsidiary, Atlas Advisers, Inc., the company also serves as an investment advisor. As of Dec 31, GDW had 283 savings branches in 10 states and lending operations in 39 states. GDW has exceeded analysts' expectations for eight consecutive quarters and during 15 out of the 16 quarters. The only time it didn't beat estimates, the company still matched analysts' forecasts. Earnings per share have grown 19% over the past five years and are projected to grow 12.3% over the next 3-5 years. As stated above, Golden West Financial has increased earnings for nine consecutive years. On Jan 24, GDW posted solid financial results for the fourth quarter and full year of 2005. Fourth-quarter earnings per share came in at $1.27. With analysts calling for $1.24, the company surprised by 2.4%. Profits in the fourth quarter of 2004 amounted to $1.09 per share. Retail savings grew 33%, while new loans totaled $13.1 billion, unchanged from the prior period. For the entire year, record earnings per share were $4.77, up 15.5% from the previous all-time high of $4.13 achieved last year. GDW also announced record deposit inflows of $7.2 billion and all-time high volume in its lending group. The company increased profits for the past nine years. On Feb 28, GDW was voted the nation's most admired mortgage services company by Fortune magazine. Companies are rated based on the following eight criteria: social responsibility, long-term investment value, employee talent, quality of products/services, innovation, use of corporate assets, financial soundness and quality of management. GDW also took home top honors last year. The Board of Directors at GDW declared a quarterly dividend of eight cents per share in late January. The company has a current dividend yield of 0.47% and a five-year average dividend yield of 0.40%. GDW's return on equity of 18% is double that of the industry average. GDW is a Zacks #2 Rank (Buy) stock. Zacks #2 Rank stocks have generated an average annual return of 21.6% since 1988. Because the Zacks Rank has a market cap bias, Growth & Income investors may find a greater number of large-cap stocks by considering both Zacks #1 Rank (Strong Buy) and Zacks #2 Rank (Buy) stocks in their selection criteria. 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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(ZEUS) - one analyst has already upped his FY 2006 estimate

Olympic Steel (ZEUS). Traders and analysts aren't waiting for the next earnings report. Background Olympic Steel is a specialized steel service center that processes and distributes flat- rolled carbon, stainless and tubular steel products. ZEUS operates as an intermediary between steel producers and manufacturers that require processed steel for their operations. ZEUS purchases flat-rolled steel typically from steel producers and responds to its customers' needs by processing steel to customer specifications and by providing critical inventory and just-in-time delivery services. Full Analysis ZEUS expects to report earnings for the quarter ended Mar 2006 on Apr 27, but traders and analysts aren't waiting. Ahead of the earnings report, one analyst has already upped his FY 2006 estimate to $2.50 per share from $2.40. And traders are bidding up the stock into new high ground. The consensus among analysts is that ZEUS will report earnings of 63 cents per share for the quarter. Important for Zacks Rank investors to note, ZEUS has not had a negative earnings surprise since the Dec 1999 quarter, and has delivered a positive earnings surprise the last three quarters. Technical Review Almost as surprising as analysts raising their estimates before an earnings release is the price action of ZEUS. On Tuesday, the stock set a new 52-week high on heavy volume ahead of the report. In fact, Tuesday's close was not only a 52-week high, but the highest close for at least twelve years (as far as our data goes back). A basic principal of Momentum investing is “Buying good companies when the market is recognizing their value.” Clearly ZEUS fits into that characterization. The company is consistently performing better than analysts expect, and the stock is setting new highs (proof that the market recognizes management's efforts). New Momentum traders often wonder why making new highs is so important. The reason lies in that new highs, by definition, mean that there is no logical place above the market where selling can be expected. There is no higher price where old owners of the stock are waiting to “get out even” if the stock will just climb a little more. While the lack of a logical resistance area doesn't mean that the market will climb without problems, it does mean that it has an easier time increasing in price. The last steel stock to be featured as a Zacks Momentum selection was AK Steel on Mch 10, 2006. AKS is up over 18% since being featured. Clearly steel stocks are a hot commodity right now. 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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(PSYS) - annualized earnings growth of 49.6% - raised forecasts for both 2006 and 2007

Psychiatric Solutions (PSYS), the leading provider of inpatient behavioral health care services, has been benefiting from favorable industry trends. Over the past five years, PSYS has enjoyed annualized earnings growth of 49.6%. Looking forward, analysts have raised their forecasts for both 2006 and 2007. Full Analysis Psychiatric Solutions primarily operates 58 inpatient behavioral health care facilities with approximately 6,600 beds in 27 states. The company also manages behavioral health units for third parties, though this unit accounts for less than 9% of total revenues. PSYS has the leading market share in most of geographic areas that it operates in. The company depends on both referrals and relationships for business and believes that its existing network provides a strong barrier against competition. Slightly under half of all revenues come from Medicaid and Medicare and 29% of revenues come from HMO and PPO plans. Nearly all of the Medicaid payments are for the care of children and adolescents. The company has benefited from favorable industry trends. The number of behavioral health facilities and, correspondingly, the number of beds dropped dramatically during the last decade. Over the past several years, legislative measures have improved access to mental health care and reimbursement rates. Combined, these two events created a great environment for growth. Revenues for Psychiatric Solutions have soared from $44 million in 2001 to $728 million in 2005. Earnings have also grown rapidly, surging at an annualized pace 49.6% over the past five years. The company has been adept at achieving organic growth. Last year, the PSYS generated same-facility growth of approximately 8%. In addition to organic growth, the company has also pursued an active acquisition strategy. PSYS has increased the amount has spent on acquisitions during each of the past three years. Furthermore, because the behavioral health facility market remains highly fragmented, the company believes it can continue to identify strategic takeover targets. In conjunction with its fourth-quarter earnings report, which was released in February, Psychiatric Solutions upped its guidance for 2006 to $1.14-$1.17 per share. Previously, the company had guided for earnings of $1.10-$1.13 per share. Analysts responded by revising their forecasts, causing the consensus estimate to rise by three cents to $1.15 per share. The covering analysts also raised their outlook for 2007, resulting in an 11-cent increase in the consensus estimate to $1.38 per share. Notably, the company has topped analyst expectations for eight consecutive quarters. PSYS trades at premium valuation to relative to other medical providers (P/E of 38.3 versus 20.7), however, the premium is justifiable given the company's historic performance and projected growth rate. Similarly, the stock's PEG multiple of 1.29 is rational given the history of positive earnings surprises. 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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(ATI) - Earnings per share are projected to grow 20.0% over the next 3-5 years

Allegheny Technologies Incorporated (ATI) reported impressive financial results for the fourth quarter and full year of 2005 in late January. Analysts' earnings estimates for 2006 and 2007 have been trending higher. Earnings per share for this Zacks #1 Rank stock are projected to grow 20.0% over the next 3-5 years. The company has a five-year average dividend yield of 4.3% and a return on equity of 52%. Full Analysis Allegheny Technologies Incorporated is one of the world's largest and most diversified producers of specialty materials. The company operates production facilities, service centers and sales offices throughout the United States and in 17 other countries. ATI operates in three business segments: high performance metals, flat rolled products and engineered products. ATI has exceeded analysts' earnings expectations in four consecutive quarters by an average margin of 18.5%. Furthermore, the company has met or beat the Street's estimates for six quarters running—meeting once. Going forward, earnings per share are projected to grow 20.0% over the next 3-5 years. On Jan 25, 2006, ATI reported strong fourth-quarter and full-year 2005 results. Earnings per share for the quarter were 96 cents—topping the Street's estimate of 88 cents by 9.1%. Profits in the prior period amounted to 35 cents per share. ATI posted revenues of $894.4 million, a 15.0% increase when compared to the $778.1 million achieved in the prior period. The company's high-performance metals business and engineered products segment fueled the impressive growth in revenues. For the entire year, profits were $361.4 million, on revenues of $3.5 billion. In 2004, ATI reported profits of $19.8 million, on revenues of $2.7 billion. Furthermore, the company was able to reduce costs, before the effects of inflation, by $125 million. ATI's target cost reduction was $100 million. The company believes 2006 will be a great year as well—improving upon the profitability growth achieved in 2005. ATI set another $100 million cost reduction goal and expects cash flow to be strong, enabling it to make strategic investments and balance sheet improvements. On Mar 1, 2006, the company announced that it will be raising prices for most of its products effective on the first of May. Analysts' optimism is also growing. The consensus earnings estimates for 2006 and 2007 increased 15.0% and 28.0%, respectively, over the past 90 days. On Feb 24, 2006, the Board of Directors at ATI declared a quarterly dividend of 10 cents per share of common stock. The company has a five-year average dividend yield of 4.3%. The company's ROE blows away that of the industry—52% compared to 22%. 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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(SAVB) - beat the fourth quarter earnings consensus by 13.7%

The Savannah Bancorp, Inc. (SAVB), a Zacks #1 Rank stock, recently beat the fourth quarter earnings consensus by 13.7%. Financial results for the quarter and full year 2005 were solid. Furthermore, the Board of Directors approved an increase in its quarterly dividend. The company's ROE is 18%, compared to 12% for the industry average. SAVB has a price-to-book (P/B) multiple of 2.7. Full Analysis The Savannah Bancorp, Inc. operates as the holding company for The Savannah Bank, N.A. and Bryan Bank & Trust. The company's target customers are individuals and small- to medium-sized businesses, including wholesale, retail and professional service businesses in the community. On Jan 31, 2006, SAVB reported solid financial results for the fourth quarter of 2005. Profits for the quarter amounted to $2.7 million, or 58 cents per share, compared to $1.8 million, or 42 cents per share in the fourth quarter of 2004. With the Street calling for 51 cents per share, SAVB surprised by 13.7%. The company is expected to release its results for the first quarter of 2006 on Apr 18, 2006. For the entire year, profits hit an all-time high. The company reported net income of $9.0 million, versus $5.7 million in 2004, an increase of 57.9%. Total assets jumped 16.4% to $718 million as of Dec 31, 2005, up from $617 million a year earlier. Loans and deposits rose 22.8% and 18.8%, respectively. The company said every operating unit within the company made a significant contribution to growth, income and efficiency. SAVB increased profits for the past nine years. Analysts' earnings estimates have been trending higher for 2006. The consensus earnings estimate for the full year currently stands at $2.35, marking an increase of 10.3% from 30 days ago. Due to the impressive results posted in 2005, the Board of Directors at SAVB announced a 3.7% increase in the company's regular quarterly cash dividend to 14 cents per share. The company has a current dividend yield of 1.6%. SAVB is currently trading at a discounted valuation. The company has a price-to-book (P/B) multiple of 2.7. Furthermore, the stock trades at a valuation of 16.8x trailing 12-month earnings and at 14.6x its current fiscal year estimated earnings. When compared to its peers, SAVB is producing a higher level of profit for its shareholders. The company has a return on equity of 18%, compared to the industry average of 12%. 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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(MERX) - a positive 100% surprise from the consensus

Merix Corporation (MERX), like many of the 1999 – 2000 high flying stocks, appears to be breaking major downtrend lines. Background Merix Corporation is a leading manufacturer of technologically advanced electronic interconnect solutions for use in sophisticated electronic equipment. Their principal products are complex multilayer printed circuit boards, which are the platforms used to interconnect microprocessors, integrated circuits and other components that are essential to the operation of electronic products and systems. Full Analysis Merix reported earnings for the quarter ended February 2006 of four cents per share, unchanged from the same quarter last year, but a positive 100% surprise from the consensus. Sales grew 84% from a year earlier at $95 million and the company returned to profitability, reporting income of $0.81 million versus a loss of $1.7 million the previous year. Technical Review We love gaps. We especially love gaps on heavy volume, and that's just what happened the day following MERX's earnings report. On Mar 31, MERX opened almost 19% higher and closed the day up 12% on volume that was 141% more than the previous day. MERX has left a gap between $12.13 and $11.16 that remains unfilled. Not only did MERX set a new 52-week high, but it was the highest close since Dec 21, 2004. Why are gaps so important? Because they are visual proof that the market has not factored in some significant item, in this case earnings. Zacks' consensus estimate gave traders the analytical proof that the earnings were unexpectedly positive. The gaps were the visual proof. Logically, a Momentum investor would expect these gaps to ultimately fill, proof that the market got carried away with the enthusiasm of the moment and, in a more reflective mood, gave up the extreme gains. It is when markets don't fill gaps that they become significant. Unfilled gaps are visual evidence that the underlying fundamentals have changed, and in this case in a positive way. When accompanied with very heavy volume, they can signal the beginning of a new move up. MERX, like many of the 1999 – 2000 high flying stocks, appears to be breaking major downtrend lines. In MERX's case the trading action of Mar 31 broke a major Fibonacci downtrend drawn from the high made on Sep 25, 2000 at $69. Closing above this downtrend, combined with the positive earnings report, gap and volume is convincing evidence that a new uptrend is in place. 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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(RBAK) - long-term growth rate of 25%

Redback Networks Inc., (RBAK) has met or exceeded earnings estimates in four out of the past five quarters, with three different analysts raising their numbers for 2006. Over the past seven days, next year's estimates have increased 6.4% to 50 cents per share. RBAK is trading at 44x those estimates, above the long-term growth rate of 25%, giving the stock a PEG ratio of 1.76. Full Analysis Redback Networks Inc., (RBAK) a leading provider of next-generation broadband networking equipment, enables carriers and service providers to build Smart Broadband Networks that are personalized, adaptive and efficient. The Smart Broadband Network provides advanced IP based subscriber services to consumers, businesses and wholesale customers. The company's carrier-class, scalable SmartEdge product family combines carrier class edge routing, advanced subscriber management and high density Ethernet aggregation functions. In conjunction with the NetOp(TM) Element and Policy Manager platforms the SmartEdge family provides a powerful and flexible infrastructure solution that enables delivery of next-generation Broadband IP services. RBAK reported strong results for last year's fourth quarter. Net revenue for the fourth quarter of 2005 was $48.0 million, an increase of 32 percent from the third quarter of 2005. Net revenue was up $15.9 million, or 50 percent, over the fourth quarter of 2004. Net revenue for the fiscal year 2005 jumped to $153.3 million, compared with $115.6 million in fiscal year 2004. "I am very pleased with the progressive revenue growth and profitability in the quarter and excited about the adoption of our SmartEdge® product family for deployment towards advanced and personalized IP based services," said Kevin DeNuccio, president and chief executive officer, Redback Networks. "Year over year, sales for our SmartEdge Service Gateway were up 105%, creating a strong footprint for continued growth in 2006." The stock sold off on the news of the AT&T/BellSouth merger announcement, as analysts feared that revenues from BellSouth would disappear. These fears are unfounded as the company only accounted for 14% of 2005 sales, and there are many other potential sources of new revenues. The company has met or exceeded earnings estimates in four out of the past five quarters, with three different analysts raising their numbers for 2006. Over the past seven days, next year's estimates have increased 6.4% to 50 cents per share. RBAK is trading at 44x those estimates, above the long-term growth rate of 25%, giving the stock a PEG ratio of 1.76. 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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(GS) - (WBCO) - (UCBH) - (EWBC) - Which companies in particular are showing good growth?

Interest Rates Improve Modestly, Help Banks With Scott Jaggers Apr 04, 2006 With a recent inversion of the yield curve and only one or two quarter-point Fed interest rate increases expected over the near term, checking in with senior banking analyst Scott Jaggers, CFA seemed like a good idea. During our discussion, we touched on interest rate issues, the trade deficit, and what group of banks are showing the most growth. How do you see interest rate developments affecting banks these days? Interest rates have gotten a little better recently. There hasn't been a huge change, but it has been noticeable. A flat yield curve or a negative yield curve is the biggest problem facing banks these days. But the problem here is nobody knows how these things track until after they've already happened. For the 3-month/10-year curve, which I look at most closely, it did go negative, but for only a short time – a month, six weeks, something like that. As of right now it is 25 basis points [bps] to the positive. Obviously, we'd like to see that number go up to 175 or 200 bps in the future, but predicting when that might be is pretty impossible. It's very hard to predict. These numbers tend to bounce around, and it could even head back negative before going back positive. Clearly, it's moved in a positive direction over the last few weeks here. And if this is the beginning of a more positive curve, obviously that would be a good thing. Did the recent issuance of a 30-year bond have anything to do with this? I don't think this one option would make much of a long-term difference, but perhaps the assumption that there may be more issuances out there in the future had something to do with it. If we're able to get a 30-year paper a little more regularly, this could soften some of the demand on the 10-year and allow it to float a bit more. And the 30-year has moved in-line with the 10-year. The thing about the yield curve is that it's surprising when you can loan someone money and charge one interest rate, and then loan at ten years and actually charge less. Presumably one's buying power over ten years will decrease; you simply have to assume some measure of inflation. So we'd need a higher return over a longer period of time to make up for risks, costs, whatever else. We're still below the normal level right now, by a long shot. It's hard to say if the recent up-trend will continue without going back first, and this doesn't necessarily depend on what short rates do in the near term. So we might see the 3-month continue to follow the stairsteps of the quarter-point Fed increases, but the 10-year could go either up or down; they don't necessarily move in tandem with one another. Is there some sort of trade deficit affect with the longer-term rates, do you feel? Smart people have started to worry about the trade deficit in this country. It's in everyone's mind, but it kind of resembles the Social Security issue: you know it's there, but it's such a major problem that people tend to simply ignore it. I don't know how much this impacts what people are doing. Those who have money invested want to see a return on it, and the safety and security of U.S. bonds – which have never ever defaulted – has always been considered one of the most solid of investment choices. And while it's true that the risk level has gone up from all these various things going on in the U.S., I don't know that anyone is doing anything different because of it. So what sorts of issues are having some impact on banks these days? I've lately been trying to figure out what's going on with home equity. This has been a huge part of loan growth over the past few years, although with rates starting to go up, I'm not sure this can continue. Recently, I found a chart that showed home equity loans – just by themselves – going up from $150 billion in loans outstanding in 2000 to something like $500 billion in 2005. So it's more than tripled in five years. In '05, this trend has started to flatten and even come back down. You'd think this would tell the story. But over than same time period, second mortgages had been flat to decreasing. Over the last three quarters, however, these have jumped. In other words, the perceived fall-off in home equity last year is really kind of a myth. The appetite for taking money out of the home is continuing, and the overall slope is as upward as ever. First it was mortgages, then it was home equity loans for awhile, and now it's second mortgages. It's all part of the same issue. Isn't this making people overextended? How do you expect this will transpire going forward? Remember what we were just saying, that a big section of the American public – $500 billion, or half a trillion dollars – is tied up in home equity at this time. Now consider that lots of these mortgage loans aren't fixed for 30 years but rather come with 3.1, 5.1, 7.1 ARMs. So if rates move up by, say, 1-2% by the time these loans are ready to reset, well, 2% of half a trillion is an additional $10 billion in interest costs facing the American public. This would clearly start to cause credit issues. Your basic home mortgage has always been considered a low-risk asset for banks. Perhaps you'd see delinquencies, but not a lot of losses. People still tend to pay off these loans even when everything else is falling apart; no one wants to lose the house. But this is a little concerning now, so perhaps it would be a good idea to keep an eye on companies that do a lot of mortgage banking. If you're deciding to invest in one banking firm or another, maybe pick the one that has less mortgage risk to it. What are some other issues regarding the state of banks these days? Banks remain good in general at this point. Of course, the industry is always cyclical, and a downturn will only be a matter of when, not if. The last time we spoke, I think we spent some time discussing Sarbanes-Oxley, which will paint a different picture for banks than in years past, when accountants were able to pad and smooth earnings. Now they'll be reporting on more of a dollar-for-dollar basis, more real-time earnings. On the way down this is OK, but when credit losses start creeping up, this could be a substantial shock for some people. Everyone who has given guidance has good credit loss numbers for 2006, but I'm not sure how well this has been factored in out there. The sell-side probably has a good handle on this issue, but I'm not sure if the general investing public buys into that, or if it even extrapolating what has been seen in recent quarters. In my modeling, companies continue to bleed money out of their reserves and are getting a boost from credit leveraging, and there is a large part of the population holding steady, adding to their loan to cover what they've charged off. One thing I look at when considering Buys, Sells and Holds is how big an impact this might expect to be going forward, and how big a turnaround there might be when things start normalizing. This could be a significant hit. Where do you see growth in the banking industry over the next couple quarters? Banks in general tend to be in pretty good shape. Over time, the smaller banks have always tended to do better. There is a continuing cycle when the smaller banks keep merging and merging with other smaller banks and getting bigger. Then, once they become too big and customers don't feel they are getting all their needs met, that's when a new little bank will spring up. We tend to like smaller banks overall, because when things start growing and improving, it's the smaller banks that tend to benefit first. The offset of this is that many people recognize this is the case, so shares have gotten expensive. There are lots of merger premiums built into a lot of these share prices. When investing, we tend to look for smaller institutions which are growing and have good capital and credit quality, and then watch it to find a good entry point. These can be tricky to identify, as many of the rather expensive stocks have actually made up for their high valuations through excellent growth. Which companies in particular are showing good growth? There are quite a few around. I'd say a majority of Asian-American banks on the West Coast have been growing pretty well, such as East West Bancorp (EWBC) and UCBH Holdings (UCBH). Growth in the Asian-American population in places like San Francisco and Los Angeles, and capitalizing on the generation of financing for international trade with the Koreans and Chinese have been good areas of growth. And, of course, real estate has had just amazing growth – it is by far the fastest growing area of loans, including construction and land development. One company in my coverage, called West Coast Bancorp (WBCO) has had a year-on-year growth rate in Q4 of 11% in total loans, but its construction loans have been up 80%. So that's clearly an area that has done exceptionally well of late. Actually, there are very few companies in my universe I wouldn't want to own. And I definitely wouldn't have said that 10-15 years ago. Back then, disintermediation was leading to talk of banks going the way of the dinosaur, and that there was no way they could compete with firms like Goldman Sachs (GS). It's not like that today; banks are a good place to be, and provide good dividend yields. In fact, 2005 is the first year on record, I think, where there were zero failed businesses. It was also a record year for net income despite net interest margins at a five-year low. There's just more business than ever before. In the last year or so, banks have underperformed the S&P on a price basis. Dividends have made up for some of this, however. Over the past five years, banks have done even better, which may surprise some people. And even as 2005 was a tough year for banks due to interest rates, normally it's at that time when investors sell bank shares, but they have actually held up quite nicely. Considering the circumstances, and especially if the yield curve goes back up, banks might be a good place to be in 2006, as well. Scott Jaggers, CFA is a senior analyst covering the finance 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

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(TNE) - Analysts' earnings estimates for 2006 have been trending higher

Tele Norte Leste Participacoes S.A. (TNE) has experienced impressive growth in both its wireless and broadband business segments. The company is currently yielding 6.2% and has a five-year average dividend yield of 2.7%. Analysts' earnings estimates for 2006 have been trending higher. Earnings per share for this Zacks #1 Rank stock are projected to grow 26.9% over the next 3-5 years. Full Analysis Tele Norte Leste Participacoes S.A., through its subsidiaries, provides telecommunications services in Brazil. The company provides services, such as fixed-line services, local services, intraregional long-distance services, inter-regional and international long-distance services, fixed-to-mobile services, public telephone services, data transmission, wireless services and network usage. On Mar 9, 2006, TNE reported that fourth-quarter net revenues reached R$4,385.5 million (US$1,874 million), an increase of 3.6% quarter-over-quarter and 2.7% year-over-year. The company's total customer base jumped 15.8% year-over-year, reaching 25.2 million customers. For the entire year, TNE posted profits of 1.1 billion reais, a rise of 48.3% when compared to 2004. Net revenues amounted to 16.7 billion reais, up 5.7% from 2004. Earnings per share are forecasted to grow a staggering 26.9% over the next 3-5 years. Analysts' earnings estimates for 2006 have increased by a large margin over the past 30 days. The consensus estimate currently stands at $1.84—22.7% higher than the consensus of a month ago. In mid-2002, TNE launched its wireless service operating under the brand name Oi. Growth in this segment has been spectacular. The company's mobile subscriber base increased 76.3% during 2004, and 50.7% in 2005. This has led to an estimated market share of 26.3% and more than ten million total subscribers. Furthermore, the broadband ADSL segment (Velox brand) has experienced considerable growth. In 2004, this segment ballooned 128.6% year-over-year. In 2005 the growth hit 62.3%. TNE's dividend yield is extremely appealing. The company is currently yielding 6.2% and has a five-year average dividend yield of 2.7%. Strong cash flows from operations have enabled TNE to keep its shareholders seeking income quite content. The company has also been quite profitable when measured on the basis of return on equity. TNE's ROE is 12%. 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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(ALE) - topped consensus earnings in four of five quarters by an average of 21.2%

ALLETE, Inc. (ALE), a Zacks #1 Rank stock, has topped the consensus earnings estimate in four of the past five quarters by an average margin of 21.2%. In mid-February, the company reported impressive profit growth in the fourth quarter of 2005. Furthermore, ALE issued EPS guidance above analysts' estimates. The company has a price-to-book (P/B) multiple of 2.3. Full Analysis ALLETE, Inc. engages in the generation, transmission, distribution and marketing of electrical power for retail and wholesale customers in the upper Midwest of the United States. The company's operations are comprised of four business segments: regulated utility, non-regulated energy operations, real estate and other. ALE has exceeded analysts' expectations in four of the past five quarters by an average margin of 21.2%. The company is scheduled to release its first-quarter 2006 financial results on Apr 28, 2006. On Feb 16, 2006, ALE reported impressive results for the fourth quarter of 2005. Earnings per share amounted to 66 cents, which topped analysts' estimates by an impressive 24.5%, and surpassed the prior year by 20.0%. Revenues increased 13.9% to $192.3 million, versus $168.8 million in the fourth quarter of 2004. In addition to announcing favorable fourth-quarter financial results, ALE issued full-year 2006 earnings per share guidance above analysts' expectations. The company expects EPS from continuing operations to rise between 15% and 20%. Analysts responded to ALE's optimistic outlook by upping their earnings projections. The consensus earnings estimate for the first quarter of 2006 currently stands at 79 cents. This represents an increase of 5.3% when compared to the consensus of 90 days ago. Forecasts for full-year 2006 profits rose 9.5% to $2.66 over the same time period. Mentioned earlier, one of ALE's business segments includes real estate holdings. The U.S. Census Bureau announced that the Florida county where ALE owns most of its real estate inventory, Flagler County, was the fastest-growing county in America for the second consecutive year. Flagler County is located along Florida's Atlantic Coast between Daytona Beach and Jacksonville. On Jan 26, 2006, the Board of Directors at ALE boosted its quarterly dividend by 15% to 36.25 cents per share. The company cited its solid balance sheet and both its short- and long-term profit forecasts as fueling the increase. ALE has a current dividend yield of 3.1%. ALE is currently trading at a discounted valuation. The company has a price-to-book (P/B) multiple of 2.3. Furthermore, the stock trades at a valuation of 17.6x 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. 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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