(SCMR) - continues to maintain one of the strongest balance sheets in the telecom equipment industry

Sycamore Networks (SCMR), a leading provider of optical switching equipment, announced plans on April 12th to acquire Eastern Research, a subsidiary of Allen Organ. We expect the deal to consummate over the next two quarters, which will provide the company the possibility of recording combined company revenues for FY2007 (beginning July 2006). Cross-selling and no product overlap should make the deal accretive with positive incremental earnings. SCMR continues to maintain one of the strongest balance sheets in the telecom equipment industry. Increased Internet traffic, and fiber-to-the-home initiatives with triple-play (Voice, Video, and Data) offerings proliferating to the consumer market, should translate to additional spending by large carriers as they address higher bandwidth requirements. Recent contract wins (U.S. Government and Sprint), along with nearly $966 million (approx. $3.45/sh.) in net cash are compelling reasons for our continued Buy rating. We feel that an effective way to view Sycamore's adjusted valuation is based on an adjusted P/E comparison, considering the magnitude of their net cash position. We use our estimate for 2006 P/E at 36.5x, but on a net cash basis (removing 3.45/share of their cash of the stock valuation), the multiple becomes reasonable at 10x 2006 earnings. Our $5.40 price target is based on net of cash 2006 forward P/E multiple of 15x, closer to the P/E multiple of its peer basis. Time and patience continue to be essential, but we anticipate that the company's financial, technological and business foundation will be rewarded with higher valuations in the near future. Courtesy: http://www.zacks.com/blog/post_detail.html?t=1144

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(NVDA) - NVIDIA Remains a Hold

NVIDIA's (NVDA) timely release of new products has helped it gain ground in the enthusiast/high-performance segment with its GeForce 7 series and nForce4 SLI. The company should also continue to make progress on the mobile and laptop markets with several new products and acquisitions. However, new releases from ATI (ATYT) and a delay in the release of Windows Vista by Microsoft (MSFT) could dampen high expectations. We therefore maintain our Hold rating, with a $31.50 price target to adjust for the 2-for-1 stock split. The company designs, develops, and markets graphics processing units (GPUs), media and communications processors (MCPs), and wireless media processors (WMPs). The company's GPUs are meant for desktop personal computers (PCs), notebook PCs, and professional workstations. The MCPs comprise the nForce family of products and other products for gaming consoles and digital media centers, including Microsoft's Xbox. Perhaps the most important part of NVIDIA's growth strategy over the long term is the mobile device market. The acquisition of MediaQ, Inc. in 2003 has helped NVIDIA gain a strong foothold in the graphics market for wireless devices. GoForce handheld GPUs are currently shipping in the new Motorola 3G RAZR V3 phone and in the new Sony Ericsson Walkman phones. In February, the company unveiled its GoForce 5500 handheld GPU, which enables DVD quality video, full H.264 processing for fluid digital television, hi-fi surround sound, rapid multi-shot photography, and console-class 3D graphics. Phones containing the GoForce 5500 are expected to be available for the 2006 holiday season. However, Microsoft has pushed back the consumer version of Windows Vista from the fall of 2006 to early 2007. While we still expect consumers to purchase machines that are compatible with new operating system beginning this summer, there is also a risk that people hold off on purchase of a new PC until after Vista is already shipping. In fact, we believe that anyone who can wait until 2007 to purchase a new PC most likely will, creating an industry wide slowdown in the consumer market. This would have a negative effect on GPU sales as most are sold with a new computer, as well as anything else that sells into the PC market. Courtesy: http://www.zacks.com/blog/post_detail.html?t=1142

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(APH) - $61 Target on Amphenol

We expect Amphenol Corporation (APH) to report first quarter EPS of $0.59, a year-over-year increase of 13.5% amid growing connector sales from the aerospace and industrial markets. Cable product margins should stabilize in the first quarter on account of realized priced hikes and lower commodity costs. By 2007, TCS operating margins can be brought up to 10% from 7.5% as it transfers to APH's low cost business model. We expect TCS to add $0.09 to FY06 EPS. Investors should add shares of APH to their portfolio. Our target price is $61.00. There are several positive factors impacting Amphenol, including the favorable conditions prevailing in the Interconnect Products business. The company's top-line growth is benefiting from these conditions that comprise improved end-market demand, new product rollouts, and market share gains. With regard to specific end markets, the military/aerospace and industrial segments continue to perform well. During the fourth quarter, these two segments reported growth rates of 21% and 10%, respectively. In fact, all its business segments (outside of auto) reported double-digit quarterly gains. Management expects continued penetration in the commercial aircraft business and increased participation in U.S. defense programs. Hence, the rise in U.S defense spending bodes well for future growth. Over the next couple of years, Amphenol is poised for strong earnings growth on account of continued strong end-market demand for mobile handsets and commercial aerospace products. Given these trends and the potential cost savings from the acquisition from TCS, we anticipate APH will report faster earnings growth than its peers. Our target price of $61.00 is predicated upon an expansion in the P/E multiple to 22.8x our forward 2006 earnings estimate. Courtesy: http://www.zacks.com/blog/post_detail.html?t=1146

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(NEU) - topped earnings estimates in the past three quarters

NewMarket Corporation (NEU), a Zacks #1 Rank stock, has topped earnings estimates in the past three quarters. The company has increased revenues for the past three years while expanding gross margins for the past four. NEU has a current dividend yield of 1.2% and a price-to-book (P/B) multiple of 2.7. Full Analysis NewMarket Corporation is the parent company of Afton Chemical Corporation and Ethyl Corporation. Through its subsidiaries, NEU manufactures, blends and delivers performance chemical additives that improve the performance of petroleum products. NEU has exceeded analysts' earnings expectations in the past three quarters. The company's earnings per share have grown 27.7% over the past five years. On Jan 31, 2006, NEU reported fourth-quarter 2005 earnings per share of 46 cents, which crushed its profits in the fourth quarter of 2004 by 170.6%. Total sales amounted to $293.7 million, compared to $231.2 million in the prior period. For the entire year, the company posted profits, excluding certain special items, of $33.7 million, or $1.95 per share, versus $24.7 million, or $1.43 per share in 2004. Total sales climbed to $1.1 billion, versus 2004 sales of $894.1 million. Growth in operating profit was linked to increased volume of products sold and an improved mix of sales, which included higher margin products. The company has increased revenues for the past three years while expanding gross margins for the past four. Analysts' estimates have soared upward for NEU. The consensus earnings estimate for this quarter and the second quarter of 2006 have risen 62.5% and 114.3%, respectively, over the past 30 days. Profit forecasts for the full years of 2006 and 2007 increased 65.5% and 76.7%, respectively, over the same time period. Two analysts covering the stock submitted upward revisions for both 2006 and 2007. The company stated that it ended the year well-positioned from a cash standpoint and should encounter no problems implementing the stock buyback program approved by its Board of Directors on Dec 16, 2005. NEU's management will be able to repurchase up to $50 million of its outstanding common stock until Dec 31, 2007. The Board also announced a quarterly dividend in the amount of 12.5 cents per common share of stock. The company is currently yielding 1.2%. NEU also stated that it will continue its efforts in the acquisitions arena. NEU, compared to its peers, has been more profitable when measured by its return on equity. The company has a ROE of 13%, compared to the industry average of 10%. NEU has a price-to-book (P/B) multiple of 2.7 and is trading at a valuation of 17.3x 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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(CRYP) - Analysts' consensus is that the company will report EPS of 45 cents, versus 34 cents earned in the same quarter last year, a gain of 32%

Cryptologic's (CRYP), short-term trend is higher, but overhead resistance must be watched on further advances. Background Cryptologic, Inc. is engaged in Internet software development and management. The company's products permit the processing of online transactions, with a current focus on e-commerce and Internet gaming software. CRYP's software is used by individuals registered in over 240 nations and territories worldwide. The company's products include Ecash and online casino software. Full Analysis CRYP is expected to release first-quarter earnings on May 10, 2006. Analysts' consensus is that the company will report EPS of 45 cents, versus 34 cents earned in the same quarter last year, a gain of 32%. This consensus estimate is particularly important given that CRYP hasn't missed meeting or exceeding consensus estimates since the June 2002 quarter, 15 quarters ago. After the release of its December 2005 quarter numbers, analysts raised their full-year 2006 estimates by an average 33 cents. For the year, CRYP is up over 37 percent. Technical Review CRYP set a new six-month high on exceptionally heavy volume on Monday, April 10 at $28.15. The stock began its current uptrend on Oct 10, 2005 when it concluded a downtrend at $14.84. Currently the stock is above both its 50- and 200-day moving averages, and those averages are maintaining a positive slope. The Moving Average Convergence Divergence (MACD) has recently indicated a ‘Buy' signal. While the trend is clearly up for CRYP, there exists significant and recent resistance above the current price, particularly in a band between $30 and $35. When looking at resistance points, pay particular attention to the length of time that has occurred between the establishment of the resistance range and the current market. Simply put, the more recent the resistance, the more potent that it can be expected to be. The logic for this is that resistance points occur because investors bought shares just before the market turned against them, as sellers began to outnumber buyers. The points become areas of expected resistance for two reasons. First, it was previously a point where sellers outnumbered buyers and might be expected to again. Second, it was the point where the last buyers of the move up purchased their stock. It is strong human nature to want to ‘get out even' thus those buyers might be logically expected to turn sellers as the stock approaches the point at which they bought earlier. Clearly CRYP's short-term trend is higher, but overhead resistance must be watched on further advances. 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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(MC) - PEG ratio of 0.75

Matsushita Electric Industrial Co., Ltd. MC is continuously making efforts to invest in key strategic businesses. The stock is cheap at 30.1x next year's estimates of 77 cents per share when the 40.3% long-term growth rate is taken into account. This gives the stock a PEG ratio of 0.75, which is attractive given the company's foothold in a rapidly growing market. Full Analysis Matsushita Electric Industrial Co., Ltd. MC is one of the world's leading manufacturers of electronic and electric products, systems and components for a wide range of consumer, business and industrial uses. Matsushita emphasizes the use of sophisticated electronics, precision and leading-edge technology to develop its products. Over the past seven decades, the company has grown from a small domestic household electrical equipment manufacturer into a comprehensive manufacturer with global operations. Matsushita, best known for its "Panasonic" brand name, has products that are also marketed worldwide under region-specific brand names, such as "National," mainly for home appliances sold in Japan, and "Technics" for certain hi-fi products. Also, some of Matsushita's subsidiaries use their own brand names, such as "Quasar," "Victor," and "JVC." In Japan, products are sold through several channels, each established according to the type of products or customers. MC is continuously making efforts to invest in key strategic businesses, such as semiconductors, for which the company has undertaken in-house manufacturing by setting up a new assembly plant in China, and panels, for which a new plasma plant has been set up in Amagasaki, Japan. With the opening of this new factory, Matsushita aims to be one of the world's largest PDP manufacturers, with a production capacity of over six million units per year, increasing to 11.1 million panels by fiscal 2009. In addition, Matsushita is also working to maximize shareholders value with its ongoing share repurchase program--the company's target is to repurchase a maximum of 120 million shares worth $1.4 billion in fiscal 2006. Since Apr 28, 2005, the company has repurchased 47.3 million shares. The stock is cheap at 30.1x next year's estimates of 77 cents per share when the 40.3% long-term growth rate is taken into account. This gives the stock a PEG ratio of 0.75, which is attractive given the company's foothold in a rapidly growing market. 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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(BNI) - topped the consensus earnings estimate in nine consecutive quarters

Burlington Northern Santa Fe Corporation (BNI) has topped the consensus earnings estimate in nine consecutive quarters. In late-January, the company posted record quarterly and annual revenues and EPS. Earnings per share are forecasted to grow 14.2% over the next 3-5 years. The company upped its capital commitment in 2006 by nearly 10%. BNI has a current dividend yield of 1.0% and a five-year average dividend yield of 1.6%. Full Analysis Burlington Northern Santa Fe Corporation engages primarily in the rail transportation business. As of Mar 13, 2006, the company operated a railroad system consisting of approximately 32,000 route miles of track, through 28 states and two Canadian provinces. BNI has topped analysts' earnings expectations in nine straight quarters by an average margin of 8.6%. Furthermore, the company has met or beat estimates in 15 consecutive quarters. Earnings per share grew 12.7% over the past five years and are projected to grow by a slightly higher rate going forward—14.2% over the next 3-5 years. On Jan 24, 2006, BNI reported stellar results for the fourth quarter and full year of 2005. Earnings per share came in at $1.25, which surpassed fourth-quarter 2004 profits by 37.4%. The Street was calling for $1.15, thus, BNI surprised by 8.7%. Freight revenues climbed 18.2%, to $3.45 billion—a new quarterly record for the company. BNI experienced double-digit revenue increases in three of its four business groups. The company is expected to announce its first-quarter 2006 results on Apr 25, 2006. For the entire year, operating revenues were a record $13.0 billion, compared to $10.9 billion in 2004. Once again, this includes double-digit increases in three of the company's four business groups. Profits came in at $1.5 billion—nearly doubling its prior year's profits of $791 million. For the first time in BNI's history, the company was able to transport more than 10 million units. BNI, fueled by its record performance in 2005, issued first-quarter 2006 earnings per share guidance above analysts' estimates. The company announced that it projects earnings per share of $1.00 for the quarter. The consensus estimate for 2006 currently stands at $4.82—5.9% higher that the consensus of 90 days ago. Forecasts for 2007 profits have jumped 8.0% to $5.52 over the same time period. Seven analysts covering the stock have submitted upward revisions for 2006 as well as 2007. On Mar 31, 2006, BNI announced that its capital program will allow it to expand its rail capacity in Texas, Wyoming, New Mexico, Washington and Missouri. This comes as part of its planned $2.4 billion capital commitment program for 2006—nearly 10% higher than 2005's spending. The Board of Directors at BNI declared a quarterly dividend of 20 cents per share of its common stock in mid-February. The company is current yielding 1.0% and has a five-year average dividend yield of 1.6%. BNI has a return on equity of 16%, compared to 12% for the industry. BNI is a Zacks #2 Rank (Buy) stock. Zacks #2 Rank stocks have generated an average annual return of 21.46% since 1988. Because the Zacks Rank has a http://www.zacks.com/help/zrankguide.php?p=13 >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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(AKS) - reiterate our Hold recommendation on the stock

AK Steel (AKS) reported a year-over-year decline in fourth quarter EPS of $0.35 amid lower shipments, lower steel prices, and ongoing cost inflation. The company's competitive position, compared to other steel stocks, is undermined by its higher raw material and legacy costs. We expect higher 2006 EPS growth based upon a 5% increase in average selling prices combined with flat natural gas cost. Operating profit per ton of steel should stay in the $35-$40 per ton range in 2006. Nevertheless, the company's cost reduction efforts and renegotiated higher-priced contracts are likely to prevent excessive margin deterioration. Hence, we reiterate our Hold recommendation on the stock. Since a large percentage (about 45-50%) of AK Steel's sales come from the automotive sector, its steel volumes are inextricably linked to this industry. The company's steel products are also consumed by the appliance, industrial machinery and equipment, and construction sectors. Its steel products include aluminum-coated stainless steel, coil-coated steel, cold-rolled coated steel, electro-galvanized steel, hot-dipped galvanized steel, and hot-rolled steel. Nearly 70% of the company's 2006 business is under contracts, 67% of which AKS has renegotiated at higher prices, which will help in boosting near-term margins in spite of lower spot steel prices. Further, AK Steel has implemented and announced further surcharges on flat-rolled carbon and electrical steel products in response to rising raw material and natural gas costs. Courtesy: Zacks.com

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(KMA) - expanding margins through operating leverage as it achieves scale economies

KMG America Corp. (KMA) is well positioned to expand its ROE from a sub-standard 2.3% in 2005 to the mid-single digits (4-5%) in 2006, and continue expanding it throughout the next several years. We expect the company to achieve this goal by rapidly growing premiums as it expands geographically, and by expanding margins through operating leverage as it achieves scale economies. Trading at 1.0x book value, we think the stock has significant upside potential and will gradually be afforded a higher multiple if, as we anticipate, the company gains traction in its group life and disability sales, which should in turn boost margins and ROE. Led by CEO Ken Kuk and CFO Scott DeLong, KMG's management is trying to repeat its success at ReliaStar, which was purchased by ING Group (ING) in 2000. The management duo began working together in the 1980's at Northwestern National Life, which was purchased in the 1990's by ReliaStar, where Ken Kuk ran the worksite marketing business - one of ReliaStar's fastest growing and most profitable divisions. KMA shares currently trade a 1.00x book value, a multiple we believe will gradually expand if, as we anticipate, the company gains traction in its group life and disability sales, which should in turn boost margins and ROE. Our six-month price target is $9.75, which incorporates a price-to-book multiple of 1.10 and equates to a 24% annualized return. However, we think the stock is a longer-term story and will likely have additional upside potential if the company executes on its business plan. Courtesy: Zacks.com

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(DHI) - expect D. R. Horton (DHI) to report second quarter EPS of $1.11, a year-over-year increase of 20.7%

We expect D. R. Horton (DHI) to report second quarter EPS of $1.11, a year-over-year increase of 20.7% amid increasing sales in higher-margin markets (Florida and Washington D.C), cost containment, and pricing power. Double-digit orders during the second quarter bode well for revenue growth in the second half of the year. Nevertheless, we remain less than sanguine on the first-time homebuyer market, which is exposed to rapidly deteriorating affordability measures and higher adjustable rate mortgages. Lower home affordability raises the risk of a continued decline in average selling prices. There are several factors that are expected to positively impact D. R. Horton's FY06 earnings outlook, such as the company's commitment to selling "down" the price curve, a low cost structure, a continued penetration in Florida, and the increasing use of land options. In markets where affordability is deteriorating, such as California, the company's strategy is to focus on moving down the price curve by selling smaller, attached (condominiums and townhomes) products. While this will help to mitigate its asset concentration risk in California, we believe DHI would be best served to reduce its exposure to this market. Management stated that it expects lower average selling prices for the remainder of the FY06. D. R. Horton repeatedly denied it had anything to do with end market weakness; rather it reflected the change in strategy of selling down the price curve. This suggests pricing affordable product is the only way to keep inventory down. Amid rising land purchase prices, we believe this strategy may eventually squeeze operating margins. Courtesy: Zacks.com

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(GM) - bold initiatives to capitalize on high-growth regions of the world

Increased focus on the Asia/Pacific region, enhancement of the product portfolio and aggressive cost cutting are some of the positives of the General Motors (GM) story. However, longer-term trends of weak North American sales and falling production volumes, mounting healthcare costs and rising raw material costs increase our concerns. Additionally, the lowering of credit ratings by the leading credit rating agencies and expected liabilities to arise out of Delphi's (DPHIQ) Chapter 11 filing compels us to maintain our Hold recommendation with a six-month target price of $20.50. We believe that GM offers investors an opportunity to be involved with an automaker that has taken bold initiatives to capitalize on high-growth regions of the world, to improve its cost structure, and to develop new products. To mitigate the difficult industry trends in North America and to maintain a long-term competitive position, General Motors is implementing a North American recovery plan. This plan includes undertaking cost reduction measures with respect to the hourly employee healthcare costs, improving capacity utilization, and renewing the product portfolio to curtail incentives. The agreement reached with the UAW is likely to reduce the GM health care liabilities by $15 billion and healthcare expenses by $3 billion annually on a pre-tax basis. However, domestic automakers have been battling exorbitantly high pension and retirement benefit costs. They are also pitted against foreign rivals who continue to steal market share. Therefore, U.S. automakers have been pressuring suppliers for concessions, while reducing their excess manufacturing capacity and shifting production to low-cost countries. Additionally, General Motors is burdened by the healthcare, pension and other liablities of Delphi employees, owing to its Chapter 11 filing. The company is likely to assume a portion of Delphi's pension and other health care obligations. It is also expected that demands will be made on GM with respect to allowing price relief on the components it sources from Delphi. Courtesy: Zacks.com

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(DRRX) - two products in phase III trials - Rated Hold

Durect Corporation (DRRX) is engaged in the development and commercialization of pharmaceutical systems to treat various chronic diseases. It utilizes four proprietary drug delivery technologies to develop pharmaceutical systems that enhance treatment capabilities in the areas of chronic pain, cardiovascular diseases, and central nervous system disorders. We are optimistic about the developing pipeline, but cautious given some recent high-profile failures. Although the company has two products in phase III trials, we are concerned about the inherent risks involved in successful completion of these trials. We thus rate the shares a Hold until we gain more visibility. We are optimistic about an injectable sustained release local anesthetic product being developed with the SABER technology called SABERbupivacaine. The product is designed to deliver up to 72 hours of post-operative pain relief. The company recently reported preliminary results, at the conference of the American College of Surgeons, from a dose escalation study (designed to include three cohorts) in hernia patients that was conducted in Australia. The trial was conducted to evaluate safety, pharmacokinetics, pain intensity, pain relief among other parameters. Preliminary results showed clear dose proportional pharmacokinetics. The product was delivered over a four-day period and it demonstrated safety across all observed doses. Earlier on, Durect had presented positive preliminary results from the second cohort of the phase II study. Results showed that the product is well tolerated and no significant clinical adverse events were reported. Also, patients using SABER-bupivacaine experienced better pain relief over a period of four days as compared to patients treated with commercial bupivacaine, the current standard of care. In mid-2004, Durect stated that it would not resume phase III clinical trials of its lead product Chronogesic Pain Therapy System. Earlier, the company had plans to resume the trial before year-end 2004. Unfortunately, Durect learned from an animal study that they have not yet solved the premature shutdown problem (stop in the delivery of drug before the intended full duration of delivery). In 2004, management stated that it was still working on the system design and hoped to resume clinical trials in 2005. But so far the company has been unable to finalize the system design and resume the phase III trial. Courtesy: Zacks.com

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(ETP) - ETP reported earnings for the quarter ended February 2006 of $1.36 per partnership unit, a 46

With Monday's breakout of an eight-month trading range, clearly things are changing for Energy Transfer Partners LP (ETP). Background Energy Transfer Partners, though it's subsidiary, Heritage Propane Partners, L.P. is one of the largest retail marketer of propane in the United States, serving residential, commercial, industrial and agricultural customers from different district locations in many states. The partnership's operations are concentrated in large part in the western and southeastern regions of the United States. The partnership's strategy is to expand its operations and increase its retail market share in order to increase the funds available for distribution to its unit holders. Full Analysis Before the open on Monday, ETP reported earnings for the quarter ended February 2006 of $1.36 per partnership unit, versus the Zacks consensus estimate of 93 cents, a 46% surprise. Total net income was reported at $250 million, up 86% from a year earlier. Technical Review For more than eight months, ETP had been locked in a $39 - $32 trading range, with the exception of a failed two-day breakdown back in October. ETP began nibbling at the top end of the range as early as Mar 20 on light volume. Nothing to get excited about. However, with the release of Monday's earnings report, ETP has decisively broken out into new high ground, confirmed with volume more than twice the two-month average. Breakouts of tight trading ranges are always significant. Tight trading ranges indicate a good balance of buyers and sellers who are in general agreement of the value of a company. Technicians often refer to these tight trading ranges as a graphical representation of supply and demand in balance. Thus when the market begins to break out, either up or down, it's confirmation that the supply/demand balance has changed significantly. It's also an early warning signal to investigate the stock further. Point and figure traders like to estimate the magnitude of the move by counting the width of the congestion area, then adding it to the upper limit (or subtracting it from the lower limit in the case of a break down). Thus, the longer the trading range (and the longer that an agreement on balance between buyers and sellers), the more significant the breakout. With Monday's breakout of the eight-month trading range, clearly things are changing for ETP. 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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(TZIX) - met or exceeded earnings estimates for 16 consecutive quarters, with several surprises surpassing 100%

The TriZetto Group, Inc. (TZIX) is enjoying increasing gross margins, which is fueling earnings growth. The company has met or exceeded earnings estimates for 16 consecutive quarters, with several surprises surpassing 100%. One analyst raised his numbers for 2006. Over the past 90 days, 2006 estimates have increased 7.4% to 58 cents per share. The stock is cheap at 19.3x next year's estimates of 83 cents per share, below the long-term growth rate of 25%, giving the stock a PEG ratio of 0.77. Full Analysis The TriZetto Group, Inc. (TZIX) resulted from the merger of System One (provider of online electronic-funds transfer technology) and Margolis Health Enterprises (provider of technology consulting to healthcare organizations). The company offers proprietary enterprise administration software, specialized component software, outsourced business services, and consulting services to payers such as health plans and benefits administrators. Since the second quarter 2005, TriZetto began introducing its Consumer-Directed Health (CDH) Solutions that help payers administer the complex designs of consumer-directed health plans. Changing market dynamics are expected to create demand for the company's products and services for the next several years. In particular, the healthcare market is experiencing a shift to one that is consumer-directed, from one based on a wholesale model. This change in market behavior is the direct result of the increase in healthcare costs. These costs have reached a point where employees are expected to cover a greater burden. This change is driving payers to introduce new offerings, which require advanced technology to deliver the new level of accountability to their beneficiaries throughout the plan process. With the completed acquisition of CareKey in December 2005, TriZetto offers solutions that not only enhance customers' revenue growth and increase administrative efficiency but now offers solutions that improve the cost and quality of care for their members. This acquisition gives the company an avenue to address the 80-90% of the healthcare market that deals with care management and the cost of healthcare. Earnings growth is being driven by a product mix that supports high gross margins and higher gross profit and cost cutting/control efforts initiated in May 2004. Although fluctuating from quarter to quarter, gross margins continue to benefit from improvements in new contract pricing, cost controls, greater operating efficiencies, and the elimination of low margin businesses that include the outsourcing business to physician group customers and the hosting and business process management services for two competing third party software platforms. TZIX has met or exceeded earnings estimates for 16 consecutive quarters, with several surprises surpassing 100%. One analyst raised his numbers for 2006. Over the past 90 days, 2006 estimates have increased 7.4% to 58 cents per share. The stock is cheap at 19.3x next year's estimates of 83 cents per share, below the long-term growth rate of 25%, giving the stock a PEG ratio of 0.77. 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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(LSS) - topped earnings estimates in seven of the past eight quarters

Lone Star Technologies, Inc. (LSS), a Zacks #1 Rank stock, has topped earnings estimates in seven of the past eight quarters. The company reported record 2005 profits in late January. LSS has a price-to-book (P/B) multiple of 2.8 and an impressive return on equity of 39%. Full Analysis Lone Star Technologies, Inc. produces and markets premium casing, tubing, line pipe and couplings for the oil and gas industry; specialty tubing for the industrial, automotive and power generation industries; and flat-rolled steel and other tubular products and services. The company has six principal operating subsidiaries: Lone Star Steel Company, Fintube Technologies, Inc., Bellville Tube Company, L.P., Wheeling Machine Products, Inc., Delta Tubular Processing, Inc. and Delta Tubular International, Inc. LSS has exceeded analysts' expectations in seven of the past eight quarters. The company's earnings per share soared 41.7% over the past five years. On Jan 23, 2006, LSS reported revenues of $337.5 million in the fourth quarter of 2005—a 25.7% increase when compared to the fourth quarter of 2004. Profits increased 108.5% to $70.9 million. For the entire year, profits were a record $223.6 million, versus $101.0 million in 2004. The company's revenues jumped 32.9% to $1.29 billion. LSS expects good things in 2006 as additional drilling projects, particularly in deeper unconventional natural gas basins, are initiated. The company increased revenues and profits for the past three years. LSS is scheduled to release its first-quarter 2006 results the morning of Apr 26, 2006. Analysts' estimates have been inching higher for LSS. The consensus earnings estimate for this quarter and the second quarter of 2006 have risen 3.5% and 4.4%, respectively, over the past 30 days. While profit forecasts for 2006 increased by a mere 1.7% in that timeframe, they jumped 6.6% to $7.97 per share for 2007. While the industry's return on equity of 17% is quite strong, LSS has been much more profitable than its peers. The company's ROE of 39% more than doubles that of the industry average. It seems as though LSS is putting its shareholders' money to great use. Furthermore, LSS is currently trading at a discounted valuation. The company has a price-to-book (P/B) multiple of 2.8. Also, the stock trades at a valuation of 8.9x trailing 12-month earnings and at 8.3x 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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(UPS) - topped the consensus earnings estimate in 12 of the past 13 quarters

United Parcel Service, Inc. (UPS) has topped the consensus earnings estimate in 12 of the past 13 quarters. The company produced record volume in 2005. Earnings per share are forecasted to grow 12.8% over the next 3-5 years. The Board of Directors increased its quarterly dividend to 38 cents per share in early February. UPS has a current dividend yield of 1.9% and a five-year average dividend yield of 1.5%. Full Analysis United Parcel Service, Inc. operates as a package delivery company, providing specialized transportation and logistics services in the United States and internationally. The company offers other services including supply chain solutions, such as freight forwarding, customs brokerage, fulfillment, returns, financial transactions, repairs and less-than-truckload transportation services. UPS has topped earnings expectations in five consecutive quarters by an average margin of 3.3%. Furthermore, the company beat estimates in 12 of the past 13 quarters. Earnings per share grew 10.5% over the past five years and are projected to grow 12.8% over the next 3-5 years. On Jan 26, 2006, UPS reported fourth-quarter 2005 earnings per share of 97 cents, which beat the Street's estimate by a penny. Profits in the fourth quarter of 2004 were 82 cents per share. Revenues amounted to $12.0 billion, compared to $9.8 billion in the prior period. Global volume jumped 7.9% to a record 16.8 million packages per day. For the entire year, UPS posted profits of $3.9 billion, versus $3.3 billion in 2004. Revenues increased 16.4% to a record $42.6 billion, while free cash flow came in at $3.5 billion. The company produced record volume in 2005—delivering 3.75 billion packages, or an average of 14.8 million per day. UPS increased revenues for the past six years and grew profits for the past two. UPS plans to invest in all three of its businesses in 2006, while executing strategies that will enable the company to capitalize on the growth in global commerce. The consensus earnings estimate for 2006 currently stands at $3.95. Six analysts submitted upward revisions to the stock over the past three months. On Apr 6, 2006, UPS announced its plan to expand flights to and from China—the world's fastest growing market. David Abney, president of the company's international operations, stated that UPS now flies to more points in China than any other U.S. airline, freight or passenger. Furthermore, thanks to improvements to its ground network over the past several months, the company will be able to reduce the delivery time of ground packages to major cities across the United States. On Feb 9, 2006, UPS increased its quarterly dividend by 15.2% to 38 cents per share. The company cited increased confidence in its financial position and growth prospects as fueling the bump in its dividend payment. The increase marks the fourth dividend hike in the past three years. UPS is currently yielding 1.9% and has a five-year average dividend yield of 1.5%. The company's return on equity is 23%, compared to 15% for the industry average. UPS is a Zacks #2 Rank (Buy) stock. Zacks #2 Rank stocks have generated an average annual return of 21.46% since 1988. Because the Zacks Rank has a http://www.zacks.com/help/zrankguide.php?p=13 >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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(BA) - topped analysts' expectations in 11 of the past 12 quarters

The Boeing Company (BA) upped its 2006 earnings guidance in early February after releasing solid results for 2005. The company has topped analysts' expectations in 11 of the past 12 quarters. Earnings per share are forecasted to grow 13.6% over the next 3-5 years. BA has a current dividend yield of 1.5% and a five-year average dividend yield of 1.7%. Full Analysis The Boeing Company operates through six segments: commercial airplanes, aircraft and weapon systems, network systems, support systems, launch and orbital systems and Boeing Capital Corporation. The company's customer base spans 145 countries around the world. BA has topped earnings expectations in 11 of the past 12 quarters. Furthermore, the company met or beat estimates in 14 of the past 15 quarters. Earnings per share are projected to grow 13.6% over the next 3-5 years. On Feb 1, 2006, BA reported fourth-quarter earnings per share of 59 cents—beating the Street's estimate of 44 cents by 34.1%. Revenues jumped 6.8% to $14.2 billion, compared to $13.3 billion in the prior period. The company's operating margin rose to 3.8% from 0.2%. For the entire year, BA's profits soared 36.8% to $2.6 billion, or $3.20 per share, from $1.9 billion, or $2.30 per share, in 2004. Revenues increased to $54.8 billion, versus $52.5 billion in the prior year, while operating margin was 5.1%, compared to 3.8% in 2004. Cash flows from operating activities grew to a record $7.0 billion. Based on its performance in 2005, BA increased its guidance for 2006. The company now expects earnings per share between $3.25 and $3.45. In 2007, profits are forecasted to increase approximately 25% to between $4.10 and $4.30 per share. BA's backlog at the end of 2005 amounted to a record $202 billion, representing an increase of 19% from the end of the third quarter and 33% for the year. The company received more than 1,000 commercial airplane orders during the year. On Apr 4, 2006, BA announced that it delivered 98 commercial planes during the first quarter of 2006—up 40% from the first quarter of 2005. Potential for 2007 and beyond looks strong as well, given the company's introduction of its large 787-10 model, which should offer better economics than the Airbus A350-900. The consensus earnings estimate for the first quarter of 2006 increased 9.0% to 73 cents per share over the past 90 days. Forecasts for full-year 2006 and 2007 profits have risen 3.9% and 4.6%, respectively, over the same time period. Upward revisions for 2006 were submitted by nine analysts covering the stock. BA has a current dividend yield of 1.5% and a five-year average dividend yield of 1.7%. The company repurchased 12.4 million of its shares during the fourth quarter and 45.2 million during the entire year. BA still has 24.3 million shares to buy back under the existing repurchase program. The company's return on equity of 20% is in line with that of the industry average. BA 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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(LEAP) - selloffs should find good support at the old resistance area of $45

Leap Wireless (LEAP) is an unusual wireless company. Background Leap Wireless is a customer-focused company providing innovative mobile wireless services that are targeted to meet the needs of customers who are under-served by traditional communications companies. With a commitment to predictability, simplicity and value as the foundation of our business, Leap pioneered Cricket® service, a simple and affordable wireless alternative to traditional landline service. Cricket service offers customers unlimited anytime minutes within the Cricket calling area over a high-quality, all-digital CDMA network. Full Analysis Leap, headquartered in San Diego, CA, is a growing wireless cellular provider who distinguishes itself by offering services without long-term commitments or credit checks. It offers both Cricket® service and Jump Mobile, a cellular product aimed at the urban youth market. According to the company's website, 52% of Cricket (R) customers have 'cut the cord' and rely on their mobile phone as their sole phone compared to an industry average of 6%. On Mar 16, LEAP announced earnings for the December 2005 quarter at eight cents per share, in line with analysts' expectations. LEAP is a Zacks #1 Rank stock. Technical Review Since going public, LEAP has been in a general uptrend and set new highs on Friday with more than twice the normal volume. With the stock breaking out of a minor congestion area at $45 on Friday, LEAP investors now have something that they haven't had for many months; a logical stop loss point below a congestion area at $42.70. LEAP appears to be headed higher and any minor selloffs should find good support at the old resistance area of $45. For the year to date, LEAP is up about 23.8% compared to last year's 40.3% return. Both performances far exceed that of the general market. 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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(DIGE) - exceeded estimates / five out of six quarters - last two over 100%

Digene Corporation (DIGE) has met or exceeded earnings estimates in five out of the past six quarters, with the last two surprises averaging over 100%. Seven different analysts raised their numbers for this year. Over the past 60 days, estimates for fiscal 2006 have increased 8.3% to 65 cents per share. Despite the strong year-to-date gain of 31%, the stock is still attractively valued. Full Analysis Digene Corporation (DIGE) engages in the development, manufacture, and marketing of its proprietary gene-based diagnostic tests for the screening, monitoring, and diagnosis of human diseases with a focus on women's cancers and infectious diseases worldwide. Its primary product is The Digene HPV Test, a FDA-approved test for human papillomavirus (HPV), the primary cause of cervical cancer. In addition to its HPV test products, its diagnostic test products portfolio includes gene-based tests for the detection of Chlamydia, gonorrhea, cytomegalovirus, and hepatitis B virus. The company reported record results for its second-quarter fiscal 2006 period. Total revenues increased 38% to $37.1 million from $27.0 million in the second quarter of fiscal 2005. Worldwide HPV test revenues grew 45% to $32.3 million from $22.3 million. U.S. HPV test revenues increased 56% to $26.9 million from $17.3 million in last year's comparable quarter. Gross margin on product sales was 86% in the quarter, compared to 80% a year earlier. Excluding special items, net income was $4.8 million, or 23 cents per share, versus $1.8 million, or nine cents per share. Analysts had only expected 10 cents per share. DIGE has met or exceeded earnings estimates in five out of the past six quarters, with the last two surprises averaging over 100%. Seven different analysts raised their numbers for this year. Over the past 60 days, estimates for fiscal 2006 have increased 8.3% to 65 cents per share. Despite the strong year-to-date gain of 31%, the stock is still attractively valued. The stock is trading at 33.5x next year's estimates of $1.09 per share, slightly above the long-term growth rate of 25.75%, giving the stock a PEG ratio of 1.30. 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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(SUG) - topped analysts' earnings estimates in four straight quarters, most recently by 35.7%

Southern Union Company (SUG), a Zacks #1 Rank stock, has topped analysts' earnings estimates in four straight quarters, most recently by 35.7%. The company's growth is expected to continue into 2006, aided by its recent acquisition of Sid Richardson Energy Services Co. SUG has a price-to-book (P/B) multiple of 1.7 and a return on equity of 11%. Full Analysis Southern Union Company, along with its subsidiaries, is engaged primarily in the transportation, storage, gathering, processing and distribution of natural gas. The company owns and operates the nation's second largest natural gas pipeline system with more than 22,000 miles of gathering and transportation pipelines. SUG has exceeded analysts' earnings expectations in four consecutive quarters. The company's earnings per share grew 46.3% over the past five years. On Mar 14, SUG reported fourth-quarter earnings per share of 57 cents. The Street projected 42 cents per share, thus, SUG surprised by an impressive 35.7%. Furthermore, the company crushed its prior year's profits of 16 cents per share by 256.3%. SUG posted operating revenues of $691.7 million, compared to $559.8 million in the fourth quarter of 2004. For the entire year, net earnings amounted to a record $178.3 million, versus $76.7 million in 2004. The jump in net earnings was fueled by both of the company's operating segments, transportation and storage of natural gas and natural gas distribution. SUG's operating revenues totaled $2.02 billion, compared to $1.86 billion in the previous year. Growth is expected to continue in 2006. SUG completed its $1.6 billion acquisition of Sid Richardson Energy Services Co. on Mar 2, 2006. SUG will inherit approximately 4,600 miles of natural gas and natural gas liquids pipelines in the Permian Basin, fully integrated North and South systems connected by a high-pressure pipeline, four active cryogenic plants and six active natural gas treating plants. The company believes the acquisition will immediately impact its earnings. SUG forecasts 2006 earnings per share between $1.70 and $1.90. On Mar 17, 2006, the Board of Directors at SUG approved the company's first regular quarterly cash dividend of 10 cents per common share of stock. SUG has a current dividend yield of 1.6%. SUG is currently trading at a highly-discounted valuation. The company has a price-to-book (P/B) multiple of 1.7. Furthermore, the stock trades at a valuation of 15.0x trailing 12-month earnings and at 14.1x its current fiscal year estimated earnings. SUG's return on equity of 11% is in line with the industry average. 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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(EBAY) - Target $50 on eBay

Target $50 on eBay Posted Mon Apr 10, 10:34 am ET by Rob Plaza, CFA eBay (EBAY) delivered another strong report in the fourth quarter, but disappointed investors with its conservative outlook for 2006. We believe the stock's valuation looks attractive and doesn't reflect the strength of the company's fundamentals. We would take advantage of any weakness in the stock and use it as a buying opportunity. We view eBay as a solid long-term holding thanks to its powerful business model and smart growth strategy, which should be able to continue generating impressive sales, earnings, and free cash flow. We maintain our Buy rating and $50 target price. The company's powerful business model, which requires no inventory and little capital investment, continues to produce impressive growth, hefty profit margins, and substantial free cash flow. These positive attributes helped the company deliver strong results in 2005. eBay's sales increased 39% year-over-year; pro forma operating income increased 42.0% year-over-year; and its pro forma earnings increased 45% year-over-year. These impressive results were driven by continued growth in registered users, which was up 33% year-over-year to 180.5 million, and gross merchandise volume (the total value of all successfully closed listings on eBay's trading platforms), which was up 30% to $44.3 billion. In addition, eBay's strong growth has enabled the company to invest in or acquire businesses outside its core U.S. auction business. By expanding into these new areas, such as payment services (PayPal) and foreign markets, eBay is working to ensure that it will be able to generate strong growth in the future. This is important because eBay's fastest growing segments are its international division (up 44% in 2005) and payments division (up 49% in 2005), both of which exceeded the 40% year-over-year growth in eBay's domestic business. The company continues to expand its reach into rapidly growing global markets, such as China, India, and Latin America, which should bode well for growth in its international division. Further, the company's highly profitable growth throws off a staggering amount of free cash flow. eBay generated $1.57 billion in free cash flow in 2005, up 58% from the $993 million it generated in 2004. Courtesy: http://www.zacks.com/blog/post_detail.html?t=1090

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(BLK) - strong EPS growth over the past five years

BlackRock, Inc., is a Zacks #1 Rank stock that has experienced strong EPS growth over the past five years. Analysts expect a continuation of this trend into the future as is evident by the projected growth rate of 14.0%. Full Analysis BlackRock, Inc. (BLK) is one of the largest investment management firms in the United States. The company offers a variety of investment products to institutional and individual investors, both domestically and internationally. Its products include fixed income, cash management, equity, and alternative investment separate accounts and mutual funds. BLK also offers a variety of risk management services. BLK is a majority owned subsidiary of The PNC Financial Services Group, Inc. (PNC), a diversified financial services company. BLK has exceeded expectations for three consecutive quarters with an average EPS surprise of 5.8%. The firm has met or exceeded expectations in 14 of the past 16 quarters. Earnings per share growth for BLK over the past five years have been an impressive 20.6%, with 14.0% forecasted over the next 3-5 years. BlackRock, with $428 billion under management, earned $189 million in the first nine months of this year, up 45% from the prior year. BLK has increased revenues and expanded gross margins over the past four years. Estimates have increased 2.6% to $3.90 per share for the year ending December 2005. Forecasts for 2006 profits are also rising, having been upped 4.1% to $4.55 per share over the past 60 days. BLK completed its acquisition of SSRM Holdings Inc., the holding company of State Street Research and Management and State Street Realty, from MetLife, Inc. earlier in the year and has indicated that the company continues to look at potential purchases. The firm's recent purchase of State Street is expected to enhance their U.S. equity and alternative investment platforms, expand their mutual fund distribution efforts, and augment their fixed income and cash management capabilities. BlackRock is also engaged in a major international expansion drive to add to its range of assets and services. Although the stock trades at P/E multiple of 31.1, the higher valuation is warranted by the company's strong growth and ability to generate value for shareholders. BLK has a ROE of an above average ROE of 28.4% and yields a dividend of 1.09%. 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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(CRS) - trading at a discounted valuation of 2.37x book value

Carpenter Technology Corporation (CRS) is a Zacks #1 Rank stock that has recently benefited from a better product mix, higher base selling prices and surcharges. Strong first quarter results have led to positive earnings forecasts for both this year and next. The firm current exhibits fundamental strength and is trading at a discounted valuation of 2.37x book value. Full Analysis Carpenter Technology Corp. (CRS) is engaged in the manufacture, fabrication and distribution of specialty metals and certain engineered products that have been used in planes, cars and trucks, electronic equipment, medical devices and instruments, industrial fittings, sporting goods, and oil and gas exploration and processing. Carpenter not only manufactures its products, but also distributes them through its own worldwide system of service centers. CRS has met or exceeded expectations in five consecutive quarters, by an average margin of 43.9%. Estimates have been trending higher for fiscal year 2006 as well as 2007. The current consensus estimate for 2006 earnings of $7.10 is 19.9% higher than it was 60 days ago. Forecasts for 2007 profits have been upped 3.5% to $8.28 per share over the past two months. Estimates for the next two quarters have increased by 21.2% and 16.2%, respectively, over the past 60 days. Carpenter Technology said fiscal first-quarter profits doubled on higher selling prices and a revitalized aerospace market. Earnings per share rose to $1.54, compared to 80 cents in the prior year's quarter. Revenues increased by 16%. The company has increased revenues and expanded gross margins over the past two years. Profits have grown over the past three years. Carpenter's most recent debt/equity ratio is 0.45. The company said it expects cash flow in fiscal 2006 of about $125 million, up from an earlier estimate of $100 million. By consistently generating positive cash flows from operations, CRS has regularly offered a dividend to its shareholders. The stock currently yields 0.85%. Despite the firm's strong performance and encouraging outlook, CRS continues to trade at a discounted valuation. The stock's price-to-book (P/B) multiple of 2.37 is more than 4x less than the S&P 500's multiple of 9.99. 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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(ZUMZ) -All four analyst raised their numbers for next year

The investment case for Zumiez is supported by its competitive strengths and aggressive growth strategy. Zumiez is able to compete against other teen specialty retailers through its differentiation strategy. Estimates for next year have increased almost 7% to $1.10 per share. All four analyst raised their numbers for next year. Full Analysis Zumiez is a specialty retailer of action sports related apparel, footwear, equipment, and accessories. The company's target market is young men and women between the ages of 12 and 24 who seek popular brands that represent a lifestyle centered on activities that include skateboarding, surfing, snowboarding, BMX, and motocross. Zumiez promotes its brand through a multi-faceted marketing approach that is designed to integrate its brand image with its customers' activities and interests. The company's stores have the look and feel of an independent specialty shop and offer diverse brands such as Billabong, Burton, DC Shoe, DVS Shoes, Element, Etnies, Hurley, Quiksilver, Roxy, and Volcom. Zumiez's merchandise mix includes both apparel and hardgoods including skateboards, snowboards, and bindings. The investment case for Zumiez is supported by its competitive strengths and aggressive growth strategy. Zumiez is able to compete against other teen specialty retailers through its differentiation strategy. The company targets those customers who are interested in action sports (skateboarding, snowboarding, etc.). This is an attractive retail market that is very popular. Zumiez seeks to capitalize on this strong market niche by offering an extensive selection of brands and styles encompassing apparel, equipment and accessories. Moreover, once Zumiez attracts customers into its stores, it attempts to keep them there. Zumiez provides more than just merchandise to sell; the company hosts interactive events, live entertainment and contests. The store layout allows the company's energetic and well-trained associates to interact with customers, which helps drive additional sales. Zumiez ended the third-quarter with 164 stores and is on track to open 35 stores in 2005, which would be square footage growth of 28%. The company announced that it plans to 42 new stores in 2006. Given the strength of the company's existing stores and room for further expansion, Zumiez is still in the early stages of its growth cycle. While it rolls out new stores at a impressive rate, the company continues to improve its store level productivity, enhance its operating efficiency, and enhance its brand awareness. This two-pronged strategy—store expansion and improved store performance— should help drive the results in its new and existing stores. ZUMZ is completed its IPO last May and has comfortably exceeded estimates in both of its first two quarters as a publicly traded company. Estimates for next year have increased almost 7% to $1.10 per share. All four analysts have raised their numbers for next year. ZUMZ's stock has performed well out of the gate, and trades at 39x next year`s estimate of $1.10. This compares with a long-term growth rate of 28.25%, giving the stock a PEG ratio of 1.38, which is not unreasonable for a growth company in its infancy. 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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(ALA) - offering Voice over ADSL service

Alcatel Sponsore (ALA), a Zacks #1 Rank stock, is emerging from a long sideways-trading range. Full Analysis Alcatel builds next-generation networks, delivering integrated end-to-end voice and data communications solutions to established and new carriers, as well as enterprises and consumers worldwide. The company, the world leader in ADSL1 equipment, has expanded its ADSL modem line with the launch of the Speed TouchTM IAD, offering Voice over ADSL service. Working on an existing copper telephone line, ADSL's transmission speed is up to 200 times faster than today's analog modems. It's often said that most stocks spend up to 80% of their time in sideways, non-trending action. For ALA the good news is that it has spent nearly the last year in a sideways congestion area. The bad news is that the strong trend was down for more than 18 months previously. Finally, there's some evidence to believe that ALA is beginning to awaken from its long slumber. Indeed, things have quietly been improving for ALA for almost a year now. In the three quarters prior, ALA delivered positive earnings surprises. In the December 2005 quarter, reported on Feb 2, ALA matched analyst estimates, reporting EPS of 27 cents for the quarter versus 11 cents per share during the same quarter last year. That amounted to a 145.5% gain. Sales were strong (42.4% higher than a year ago) as was income, reported at $373.7 million versus $162.7 million in the quarter a year ago, a gain of 129.7%. One of the basic rules of Momentum investing is to buy good stocks at the same time that the market is recognizing and rewarding the company's improvements. A Zacks #1 Rank stock, ALA is clearly improving internally. This week, the stock reached its highest price in over a year on heavy trading volume. ALA has moved above its 200-day and 50-day moving averages and those averages themselves are trending higher, indicating that the underlying trend for ALA remains up. 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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