(WFT) - company has topped first-quarter estimates by 12%, prompting analysts to raise their full-year forecasts

Analysts are continuing to raise their earnings forecasts on Weatherford International, Ltd. (WFT). Over the past few months, the already bullish consensus estimates for 2006 and 2007 have been revised upward by 9.6% and 15.9%, respectively. This positive momentum has resulted in a strong relative return for shareholders. Full Analysis When we last featured Weatherford International on Feb 23, analysts were projecting full-year earnings of $2.28 per share. Since that time, the company has topped first-quarter estimates by 12%, prompting analysts to raise their full-year forecasts. The new consensus estimate calls for profits this year of $2.50 per share. Perhaps more impressively, the outlook for 2007 has also improved with the consensus estimate rising by nearly 50 cents to $3.42 per share. The markets have been paying attention. Shares of WFT outperformed the S&P 500 by a wide margin over the past four months (+10.3% versus -3.6%). Yet, the stock still trades at a discount valuation with a PEG multiple of just 0.76. Weatherford is a leading manufacturer and provider of equipment and services used in the drilling, completion and production of oil and natural gas wells. The company has benefited from elevated oil prices. Specifically, WFT is seeing increased demand because of growth in both North American rig counts and international spending on drilling and completion. In addition, Zacks Equity Research analyst Sheraz Mian notes that WFT's internal focus on improving returns in its core business and enhancing its exposure to faster growing new technologies has also been yielding positive results for shareholders. "The focus is both internally through research and development and externally by making strategic acquisitions. Last year, the company spent $107 million on R & D, roughly 3% of its total revenue, to help organic growth. New technologies are paying off, as new offerings are enhancing drilling and production operations while contributing to bottom line growth given the relatively higher margins on new products", Mian stated recently. Current brokerage analyst projections show WFT achieving a 24% growth rate over the next 3-5 years. This rate represents an acceleration over the company's historic five-year growth rate of 14.7%. Given WFT's track record of exceeding expectations, (the company has beaten estimates during nine out of the past 10 quarters), this forecast could prove to be conservative. 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. Blog Home

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(VNT) - announced that first-quarter 2006 consolidated revenues soared 32.3%

National Telephone Company of Venezuela (VNT), a Zacks #1 Rank stock, reported solid revenue and subscriber growth for the first quarter of 2006. Based on its stellar results, the company raised its full-year 2006 earnings guidance along with its expectation for year-end subscriber numbers. Analysts' earnings estimates have been on the rise for this quarter as well as for this year. The company has a price-to-book ratio of 1.0 and a PEG ratio of 0.13. Full Analysis National Telephone Company of Venezuela provides a number of telecommunication services throughout Venezuela including local, national and international wireline telephone service as well as private network, data, public telephone, rural telephone and telex services. Through its subsidiaries, VNT also provides wireless communications, Internet services and telephone directories. On Apr 26, 2006, VNT announced that first-quarter 2006 consolidated revenues soared 32.3% when compared to the prior-year period. The company's mobile and broadband customer bases jumped 75.1% and 68.5%, respectively. Based on the company's strong mobile segment, in which nearly 400,000 net additions pushed its subscriber base to nearly 5.6 million, VNT raised its full-year earnings guidance to between $443 and $502.3 million. The company also projects year-end mobile subscribers to reach a total of 7.8 million, versus its previous estimate of 6.3 million. Earnings per share are forecasted to grow by an impressive 44.8% over the next 3-5 years. Analysts' earnings estimates have been trending higher for VNT. The consensus estimate for this quarter increased 35.3% over the past 60 days. For the full year, analysts upped their profit forecasts by 35.3% as well to $3.18 per share. Despite its growing subscriber base and upwardly revised guidance, VNT continues to trade at a highly-discounted valuation. The company is currently trading at a valuation of 7.6x trailing 12-month earnings and at 5.7x current fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 16.1x trailing 12-month earnings and at 14.9x its current fiscal-year estimated earnings. The market's price-to-book ratio is nearly four times that of VNT—3.9 compared to 1.0. VNT has a miniscule PEG ratio of 0.13. 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. Blog Home

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(BAM) - consensus estimates for this quarter and next quarter jumped 23.5% and 17.0%, respectively, over the past 60 days

Brookfield Asset Management Inc. (BAM) recently topped the Street's quarterly earnings estimate when it posted first-quarter profits of 43 cents per share. Earnings per share are projected to grow 13.0% over the next 3-5 years. Strong cash flows from operating activities have led to a current dividend yield of 2.4% and a five-year average dividend yield of 3.1%. Analysts have become increasingly optimistic about this Zacks #1 Rank stock-upping their estimates for both this year and next. Full Analysis Brookfield Asset Management Inc., formerly known as Brascan Corporation, is an asset manager that focuses on property, power and infrastructure assets. The company has approximately $50 billion of assets under management. BAM operates through four business units: property operations, power operations, timber and infrastructure operations and specialty funds operations. BAM topped the Street's earnings estimate in two out of the past three quarters. Going forward, earnings per share are forecasted to grow 13.0% over the next 3-5 years. On Apr 28, 2006, BAM reported first-quarter 2006 profits of $179 million, or 43 cents per share, compared to $165 million, or 39 cents per share in the prior-year period. BAM's power-generation assets, thanks to rising prices and water levels, fueled the company's solid first quarter. CEO Bruce Flatt stated that BAM is the largest non-government owner of hydroelectric power plants in North America. The company has moved out of cyclical businesses while shifting its attention to long-term investments, including timber. Furthermore, BAM continues to invest in various projects including $300 million on two wind energy projects in northern Ontario (expected to be in operation by early next year) and power business in Brazil. Operating cash flow for the quarter amounted to $307 million-nearly double the $155 million reported in the first quarter of 2005. As a result, the Board of Directors at BAM declared a dividend of 16 cents per Class A Share, payable on Aug 31, 2006, to shareholders of record as of the close of business on Aug 1, 2006. The company is currently yielding 2.4% and has a five-year average dividend yield of 3.1%. The consensus estimates for this quarter and next quarter jumped 23.5% and 17.0%, respectively, over the past 60 days. Profit forecasts for this year and next year have risen 24.8% and 22.6%, respectively, over the past two months. The company's return on equity, a common measure of a firm's profitability, exceeds that of the industry average-17% 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. Blog Home

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(FRK) - Florida Rock is the potential bad news reflected in the price?

Full Analysis Business is booming at FRK. When the company last reported earnings on Apr 25, EPS of 86 cents was 38.7% higher than analysts' expectations. That was also an eye-popping 75.5% increase from the previous year's EPS of 49 cents. Sales grew 16.1% to $364.1 million and income rose 25.3% to $57.5 million. Technical Analysis So what do Momentum investors do when the market as a whole is going down? They start looking for stocks liable to lead the next upturn. As mentioned yesterday, a good way to do that is by looking for failed moves to the downside. Despite a growing business, improving earnings and more efficient balance sheet control, FRK has dropped 34% in just about a month. Certainly the very weak general market had an effect on this Zacks #1 Rank stock, but more importantly, concerns about a slow down in home building played a more important part. These are very real concerns, but the question becomes 'at what price is the potential bad news already reflected in the price'? Certainly the price action of the last few days may indicate that FRK already has discounted much of the effect of such a slow down. After setting a new low for the move on Tuesday (and, indeed, closing on the day's low) FRK had a nice bounce on Wednesday and an even better one yesterday. With the stock's indicators all heavily oversold, this stock is ripe for a correction to the upside. But Momentum traders aren't looking for a simple correction, we're looking for evidence that a new trend is emerging. FRK found important support around the $45 level, where it stopped a remarkably similar slide back in November 2005. A new uptrend would be confirmed on decisive closes over the $55 level. Put that on your watch list. Background Florida Rock Industries is principally engaged in the production and sale of ready mixed concrete and the mining, processing and sale of sand, gravel and crushed stone (construction aggregates). The Company also produces and sells concrete block and prestressed concrete and sells other building materials. Substantially all of the Company's operations are conducted within the Southeastern United States, primarily in Florida, Georgia, Virginia, Maryland, Washington, D.C. and North Carolina 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. Blog Home

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(GRP) - company has exceeded expectations for 10 consecutive quarters

Grant Prideco, Inc. (GRP) trades at a low PEG ratio despite strong growth and rising expectations. The company has recorded explosive earnings growth and is expected to maintain a strong growth rate into the future. Since GRP last reported in April, analysts have raised their full-year estimates for both 2006 and 2007. Nonetheless, the stock trades at a PEG ratio of just 0.43. Grant Prideco, Inc. provides drill stems, drill bit products and drill pipes for oil and gas wells. The company is the world leader in drill stem technology. Its premium products are used in extended reach, directional, horizontal, deep gas, offshore and ultra-deepwater drilling. GRP is dependent on spending by exploration and production companies. Sustained high oil prices have benefited oilfield equipment companies, such as Grant Prideco, because exploration and production companies are spending more on maintenance and new wells. As long as crude prices remain at elevated levels, GRP should do well. The company has recorded strong growth over the past several years. Since 2001, revenues have nearly doubled. Over the same period, operating margins have widened, which has led to an explosive rise in earnings. Per share profits totaled $1.74 in 2005 versus just 51 cents per share in 2001. Analysts expect this strong growth to continue, as is evident by the five-year projected growth rate of 32.8%. (In comparison, GRP's peers have a five-year projected growth rate of 23%). Judging by GRP's track record, the long-term forecast could prove to be conservative. The company has exceeded expectations for 10 consecutive quarters. Most recently, GRP reported first-quarter results of 67 cents per share, nine cents above expectations. The company anticipates generating profits of between $2.75 and $2.85 this year. Analysts are more optimistic, forecasting earnings of $2.89 per share for 2006. Both the 2006 and the 2007 consensus estimates were revised upwards following GRP's first-quarter report. Despite the strong growth and bullish prospects, GRP trades at a discounted valuation. The stock is valued at 14.1x projected earnings for this year. This equates to a PEG ratio of 0.43. 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. Blog Home

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(MET) - surprised to the upside by 23.2% - also upped its full-year 2006 profit guidance

MetLife, Inc. (MET) exceeded analysts' earnings expectations for seven consecutive quarters by an average margin of 14.1%. Earnings per share grew 28.3% over the past five years and are forecasted to grow 10.5% over the next 3-5 years. After the company's first quarter produced solid results, MET raised its full-year 2006 earnings per share guidance. MET increased its 2005 annual dividend by 13%. Full Analysis MetLife, Inc. provides insurance and other financial services to individual and institutional customers throughout the United States and internationally. The company operates in five segments: institutional, individual, auto and home, international and reinsurance. MET surprised to the upside by 23.2% on Apr 27, 2006 when it reported first-quarter 2006 profits of $1.33 per share. This marked the seventh straight quarter in which the company beat the Street's earnings estimate. During that span of time, the average margin of surprise was 14.1%. When compared to the first quarter of 2005, the company's earnings were up 19.8%. Earned total premiums, fees and other revenues increased 12% to $7.9 billion. Earnings per share grew 28.3% over the past five years and are forecasted to grow 10.5% over the next 3-5 years. The company increased revenues and grew profits for the past four years, most recently by 14.8% and 68.6%, respectively, in 2005. In addition to reporting solid results in the first quarter, MET also upped its full-year 2006 profit guidance. The company now expects earnings per share between $4.55 and $4.75 from its previous forecast between $4.25 and $4.50. MET's acquisition of Citigroup's Travelers Life & Annuity back on Jul 1, 2005, continues to reap benefits for the company. The purchase has expanded MET's strong and diverse product portfolio as well as its distribution channels. Furthermore, on Jun 7, 2006, Moody's Investors Service revised its outlook on MET to stable from negative, reflecting the company's successful integration with Travelers Life & Annuity. The consensus estimate for this year currently sits at $4.78 per share. Over the past 90 days, it has jumped by 6.7%. Nine analysts covering the stock upped their estimates for 2006. The company's return on equity of 12% is in line with the industry average. MET has a current dividend yield of 1.0% and a five-year average dividend yield of 0.71%. The 2005 annual dividend of 52 cents per common share of stock represented a 13% increase from the 2004 annual dividend of 46 cents. MET is a Zacks #2 Rank (Buy) stock. Zacks #2 Rank stocks have generated an average annual return of 22.0% 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. Blog Home

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(ZEUS) - Profits amounted to 76 cents per share--beating the Street by 18.8%

Olympic Steel, Inc. (ZEUS), a Zacks #1 Rank stock, exceeded analysts' earnings expectation for four straight quarters by an average margin of 27.7%. The company recently completed its acquisition of Tinsley Group PS&W Inc., a fabricator of heavy construction equipment components. Consensus earnings estimates have been on the rise. The Board of Directors at ZEUS recently approved a quarterly cash dividend. The company has a price-to-book ratio of 1.4. Full Analysis Olympic Steel, Inc. sells and distributes processed carbon, coated and stainless flat-rolled sheet, and coil and plate steel products in the United States. The company operates as an intermediary between steel producers and manufacturers that require processed steel for their operations. When ZEUS reported its first-quarter 2006 results on Apr 27, 2006, it marked the fourth straight quarter in which the company topped analysts' earnings expectations. Profits for the quarter amounted to 76 cents per shar--beating the Street by a healthy 18.8%. Over the past four quarters, the average positive earnings surprise for ZEUS equates to an impressive 27.7%. On May 22, 2006, ZEUS announced that it will acquire Tinsley Group PS&W Inc., a construction equipment company, and a subsidiary of Eliza Tinsley Group PLC, a privately held English company, for $10.1 million in cash. On Jun 5, 2006, the acquisition was finalized. Michael D. Siegal, chairman and chief executive of Olympic Steel stated, “The PS&W acquisition is an integral part of our strategy because it complements our existing tempering and plate processing expertise while expanding our fabricating capabilities.” Analysts' optimism regarding the future earnings prospects for ZEUS has been growing. The consensus estimate for this quarter and next quarter increased 14.5% and 21.6%, respectively, over the past 90 days. Profit forecasts for this year and next year jumped 18.3% and 17.8%, respectively, over the past three months. The Board of Directors at ZEUS recently approved a quarterly cash dividend of three cents per share. The dividend will be distributed on Jun 15, 2006 to shareholders of record as of Jun 1, 2006. The company has a current dividend yield of 0.41%. The company is currently trading at a valuation of 14.8x trailing 12-month earnings and at 10.5x current fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 16.0x trailing 12-month earnings and at 14.9x its current fiscal-year estimated earnings. ZEUS has a price-to-book ratio of only 1.4, compared to 3.9 for the 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. Blog Home

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(CRVL) - CorVel Corporation makes new highs

Full Analysis CRVL reported a 37.5% positive earnings surprise on Jun 1, reporting EPS of 33 cents. When compared to the 24 cents posted last year, this also equated to a 37.5% gain. Sales were off 6.2% at $66.55 million, while income was reported at $3.1 million, up 10.7%. Technical Analysis Things have turned around in a hurry for CRVL. After missing earnings expectations for the Sep 2005 quarter, the stock made new 52-week lows in the weeks after the earnings report was released on Nov 7. CRVL traded as low as $16.31 on Nov 22 in reaction to the disappointment. By the time CRVL missed expectations again on the Dec 2005 quarter the negative news was in the stock price and the stock failed to equal the Nov 22 low. Since that time the stock has moved impressively high, currently up about 38% YTD. The stock made a new 52-week high on Tuesday, as it continues to react to the improving fortunes of the company. Currently the stock is trading above its 200-day moving average, and the moving average itself is in a positive slope. With no resistance above the market and the fundamental fortunes of the stock improving, CRVL looks to improve in price during the summer. Background CorVel Corporation is an independent nationwide provider of managed care services designed to address the medical issues of healthcare benefits provided under workers' compensation, group health and auto insurance policies. The company's services include, but are not limited to, automated medical fee auditing, national preferred provider network, early intervention, utilization review, medical case management, vocational rehabilitation services, telephonic case management and independent medical examinations. 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. Blog Home

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(GS) - Earnings per share amounted to $4.78, exceeding analysts' expectations by a solid 14.4%

The Goldman Sachs Group, Inc. (GS), a stock that we first featured on Dec 23, 2006, continues to shine. The company recently reported that both profits and revenues more than doubled in the second quarter of fiscal 2006. GS exceeded analysts' estimates in 13 of the past 14 quarters. Earnings per share are projected to grow 14.2% over the next 3-5 years. The company has a current dividend yield of 1.0%. Full Analysis The Goldman Sachs Group, Inc. is a global investment banking and securities firm, providing a full range of investing, advisory and financing services worldwide. The company serves a substantial and diversified client base that includes institutions as well as high net worth and retail investors. GS was first highlighted as a Growth & Income pick nearly six months ago on Dec 23, 2005. In the two quarters that have since elapsed, the company topped the Street's earnings estimate by an average margin of 33.2%. Earnings per share grew 27.8% over the past five years and are forecasted to grow 14.2% over the next 3-5 years. On Jun 13, 2006, GS reported yet another impressive quarter. The company posted second-quarter fiscal 2006 net revenues of $10.1 billion, compared to $4.81 billion in the prior-year period. Earnings per share amounted to $4.78, exceeding analysts' expectations by a solid 14.4%. Profits in the second quarter of fiscal 2005 were $1.71 per share. Furthermore, shareholders were happy to hear that GS continued its dominance in the investment banking arena, ranking first in worldwide announced and completed mergers and acquisitions for the calendar year-to-date. The consensus earnings estimate for the third quarter of fiscal 2006 currently sits at $3.15. This represents a 15.0% jump when compared to the consensus of 90 days ago. Profit forecasts for the full year rose 21.9% over the same time period, with 10 analysts submitting upward revisions. The Board of Directors at GS announced a dividend of 35 cents per common share of stock. The dividend will be paid on Aug 24, 2006 to shareholders of record as of Jul 25, 2006. The company is currently yielding 1.0%. On Apr 29, 2006, a consortium led by GS purchased an 8.9% stake in Industrial and Commercial Bank of China, China's biggest bank, for $3.8 billion. The group of investors also includes American Express Co. (AXP) and Allianz AG Holding. This should bode well for GS considering investors are eager to invest in China's bustling economy and financial sector. GS increased revenues, expanded gross margins and grew profits for the past three years. The company has been more profitable than its peers, as evidenced by its return on equity of 25%, compared to the industry average of 14%. GS is a Zacks #2 Rank (Buy) stock. Zacks #2 Rank stocks have generated an average annual return of 22.0% 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. Blog Home

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(GOL) - company has exceeded earnings estimates in six out of the past seven quarters

Gol Linhas Aereas Inteligentes (GOL) has exceeded earnings estimates in six out of the past seven quarters. 2006 earnings estimates have increased 12.4% over the past 90 days to $2.00 per share. Three analysts raised their numbers for this year, while two have done so for next year. The stock is attractively valued at 12.5x next year's estimates of $2.55 per share, well below the company's long-term growth rate of 24.50%, giving the stock a PEG ratio of 0.51. Full Analysis Gol Linhas Aereas Inteligentes S.A., through its subsidiary, Gol Transportes Aereos S.A., provides airline services in Brazil, Argentina, Bolivia, Uruguay, and Paraguay. The company's services include passenger, cargo, and charter services. As of March 20, 2006, Gol Linhas provided 440 daily flights to 49 destinations and operated a fleet of 45 Boeing 737 aircraft. GOL continues to secure new routes. It received authorization from the International Relations Department of the ANAC (National Agency of Civil Aviation) to operate regular flights to Santiago de Chile. With this authorization, the Company will begin taking the necessary steps to operate on this new route. The company reported excellent May 2006 traffic numbers. System-wide passenger traffic (RPK) increased 56%, while capacity (ASK) increased 54% y-o-y. GOL's system load factor for the month of May 2006 was 73%. Domestic passenger traffic (RPK) for May increased 54%, and capacity (ASK) increased 51%. GOL's domestic load factor for the month of May 2006 was 74%. International passenger traffic (RPK) for May increased 105%, while capacity (ASK) increased 96%. International load factor for the month of May 2006 was 62%. GOL reported excellent earnings for the first quarter. Net income for the quarter was a record $82.9 million, representing a 20.8% net margin. Earnings per share was 42 cents, three cents better than the consensus. The company earned 26 cents in the year ago period. The company has exceeded earnings estimates in six out of the past seven quarters. 2006 earnings estimates have increased 12.4% over the past 90 days to $2.00 per share. Three analysts raised their numbers for this year, while two have done so for next year. The stock is attractively valued at 12.5x next year's estimates of $2.55 per share, well below the company's long-term growth rate of 24.50%, giving the stock a PEG ratio of 0.51. 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. Blog Home

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(CNY) - topped the Street's estimate by 46.4% and nearly tripling the 15 cents earned in the prior-year period

Carver Bancorp, Inc. (CNY), a Zacks #1 Rank stock, recently reported solid fourth-quarter and fiscal 2006 results. Furthermore, the Board of Directors approved a quarterly cash dividend of eight cents per share. CNY has a price-to-book ratio of 0.88, compared to 3.9 for the market. The company's $11.1 million acquisition of Community Capital Bank is expected to close in late-September. Full Analysis Carver Bancorp, Inc. operates as the holding company of Carver Federal Savings Bank, a federally chartered savings bank that operates eight banking offices in the New York City area. The bank originates various types of loans and provides savings, checking, money market and individual retirement accounts. On May 11, 2006, CNY posted fourth-quarter fiscal 2006 earnings per share of 41 cents-topping the Street's estimate by an impressive 46.4% and nearly tripling the 15 cents earned in the prior-year period. Net interest income increased slightly by $25,000, or 0.5%, due to the company's strategy of reducing lower yielding investments and replacing them with higher yielding loans. For the entire fiscal year, profits soared to $3.8 million, compared to $2.5 million achieved in fiscal 2005. Net interest income jumped 0.6% to $18.9 million. On Apr 6, 2006, CNY agreed to purchase Brooklyn, N.Y.-based Community Capital Bank in a transaction valued at $11.1 million. The combined bank will lead to 10 branches in New York City and assets of $800 million. The acquisition has been granted approval by the Boards of Directors of both companies. The deal should close by Sept 30, 2006. The consensus earnings estimate for this quarter has remained relatively flat, while profit forecasts for next quarter doubled to 28 cents per share over the past 60 days. For fiscal 2007, analysts' estimates increased 17.2% to $1.50 over the same time period. On May 9, 2006, the Board of Directors at CNY declared a quarterly cash dividend of eight cents per share. The company has a current dividend yield of 1.9% and a five-year average dividend yield of 0.92%. The company is currently trading at a valuation of 11.5x trailing 12-month earnings and at 11.3x current fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 16.2x trailing 12-month earnings and at 15.1x its current fiscal-year estimated earnings. CNY has a price-to-book ratio of 0.88, compared to 3.9 for the 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. Blog Home

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(CBM) - Cambrex Corp. Is the trend about to change

Full Analysis CBM reported first quarter earnings on Apr 27 of 26 cents per share, up from 15 cents in the same period last year. The report represented a 44% positive earnings surprise for CBM, earning it a Zacks #1 rank. Sales were up 1.75% to $118.8 million Technical Analysis Currently, CBM is in a trading range that extends from $19.50 to $21.00. The stock briefly tested the lower level of support on Monday, but was unable to continue the breakout. On Tuesday, CBM returned to its trading range. This is a company that has good support at the current level and better support at $19.00. Given that the stock had a failure to break out to the downside of its trading range, that support looks to be very solid. Failed moves like CBM experienced are often the first warnings that a Momentum trader gets that the stock is ready to change direction. Failed moves are important because they indicate that the strength of the current trend is waning. And alert Momentum traders are always looking for opportunities in good stocks (such as a Zacks #1 rank company) that appears to be ripe for a new direction. Momentum traders are unlikely to want to buy CBM immediately, but the improving earnings, a failed move to the downside and a Zacks #1 rank all add up to a stock worth watching in the near term. A close above $21.00 would be the final indication of a new uptrend developing. Background Cambrex Corporation manufactures and markets a broad line of specialty chemicals and commodity chemical intermediates and also manufactures chemicals to customer specifications. There are five product categories: pharmaceutical bulk actives; pharmaceutical intermediates; organic intermediates; performance enhancers; and polymer systems. 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. Blog Home

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(PNCL) - Passenger Load Factor was 81.8%, an increase of 9.4 points over May 2005 levels

Pinnacle Airlines Corp. (PNCL) has exceeded earnings estimates for four consecutive quarters, three of which registered suprises in excess of 30%. Two out of three analysts covering the stock increased their estimates for fiscal-2006. Over the past 90 days, 2006 estimates have increased 12.9% to $1.84 per share, while 2007 estimates have risen 6%. Full Analysis Pinnacle Airlines Corp. was incorporated in Delaware on January 10, 2002 to be the holding company of Pinnacle Airlines, Inc., which was incorporated in Georgia in 1985. Northwest Airlines acquired Pinnacle Airlines, Inc. in April 1997. Since the acquisition, PNCL has provided regional airline service exclusively to Northwest. During the time that Northwest was PNCL's sole owner, the company was operated as a business unit of Northwest, without regard to its stand-alone profitability. On November 25, 2003, PNCL completed an initial public offering and became a publicly traded company. PNCL is expected to derive continued benefits from the amendments made to its ASA with Northwest in 2003 and 2004. The amendments extended the contract term to December 31, 2017 (from February 29, 2012). While the amendments lowered Pinnacle's target operating margin to 10% from 14%, there is a collar on PNCL's actual margin through 2005 of 9-11%. The margin range is slated to expand to 8-12% in 2006 and 2007. Given current industry conditions, wherein margins are being compressed by high fuel prices and overcapacity, even this lower margin can be expected to provide relief for the company. During May, Pinnacle transported 796,844 Customers, 11.9% more than the same period last year. Passenger Load Factor was 81.8%, an increase of 9.4 points over May 2005 levels. During the month, Pinnacle flew 460.3 million Available Seat Miles ("ASMs"), an 8.0% reduction when compared to the same period last year. Revenue Passenger Miles ("RPMs") grew 3.8% to 376.4 million. The company has exceeded earnings estimates for four consecutive quarters, three of which registered suprises in excess of 30%. Two out of three analysts covering the stock increased their estimates for fiscal-2006. Over the past 90 days, 2006 estimates have increased 12.9% to $1.84 per share, while 2007 estimates have risen 6%. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. The ranks are updated every Monday morning on Zacks.com. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. 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. Blog Home

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(CRS) - surpassed its profits in the prior-year period by an astonishing 68.1%

Carpenter Technology Corporation (CRS), a stock that we first featured on Dec 27, 2005, continues to shine. The company exceeded analysts' earnings expectations for seven consecutive quarters, most recently by 28.2%. Furthermore, CRS posted record revenues in its most recent quarter. The stock is still a Zacks #1 Rank and analysts' estimates have been on the rise. CRS has a price-to-book ratio of 3.1 and a current dividend yield of 0.58%. Full Analysis Carpenter Technology Corporation is engaged in the manufacture, fabrication and distribution of specialty metals and certain engineered products. The company not only manufactures its products, but also distributes them through its own worldwide system of service centers. When CRS was first presented as a Value pick on Dec 27, 2005, we mentioned its habit for exceeding the consensus earnings estimate. In the two quarters since, the trend has continued. CRS most recently posted record third-quarter fiscal 2006 earnings per share of $2.32, which beat the Street by an impressive 28.2% and surpassed its profits in the prior-year period by an astonishing 68.1%. The company has now exceeded analysts' expectations in seven straight quarters by an average margin of 35.5%. Revenues amounted to another new record—$426.0 million, up 24.5% when compared to the third quarter of fiscal 2005. For the first nine months of the current fiscal year, net sales increased to $1.1 billion, versus $951.8 million for the same period a year ago. Profits soared 64.2% to $143.8 million. Looking ahead, the company expects the momentum in the aerospace market to drive operating performance. Demand for aerospace materials has been especially strong due to the number and models of aircraft being built. The consensus earnings estimates for this quarter and next quarter increased 16.2% and 6.9%, respectively, over the past 60 days. Profit forecasts for this fiscal year and next fiscal year jumped 13.9% and 21.9%, respectively, over the same time period. Three analysts covering the stock submitted upward earnings revisions for both fiscal 2006 and fiscal 2007. On Apr 28, 2006, the Board of Directors at CRS announced a quarterly cash dividend of 15 cents per common share of stock. The company is currently yielding 0.58% and has a five-year average dividend yield of 2.8%. The company is currently trading at a valuation of 14.0x trailing 12-month earnings and at 13.0x current fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 16.4x trailing 12-month earnings and at 15.3x its current fiscal-year estimated earnings. CRS has a price-to-book ratio of 3.1, compared to 3.9 for the market. The company's return on equity exceeds that of the industry average—25% compared to 20%. 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. Blog Home

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(NDE) - met or topped the Street's estimate in 15 straight quarters

IndyMac Bancorp, Inc. (NDE) beat the Street's earnings estimate for six straight quarters, most recently by 9.3%. The company raised its full-year 2006 earnings per share guidance back in late-April. The Board of Directors at NDE recently increased its cash dividend by 21% to 46 cents per share. The company is currently yielding 4.1%. Full Analysis IndyMac Bancorp, Inc. is the holding company for IndyMac Bank, F.S.B., the largest savings and loan in Los Angeles and the 10th largest mortgage originator in the nation. The bank operates through two segments: mortgage banking and thrift. NDE exceeded analysts' earnings expectations for six consecutive quarters by an average margin of 7.4%. Furthermore, the company met or topped the Street's estimate in 15 straight quarters. Earnings per share are projected to grow 13.4% over the next 3-5 years. On Apr 25, 2006, NDE posted first-quarter profits of $80 million, or $1.18 per share. With analysts expecting $1.08, the company surprised to the upside by 9.3%. When compared to the first quarter of 2005, earnings per share were up 16.8%. Net revenues hit a new record-$304.5 million. Stronger mortgage production fueled the first-quarter results. Based on its strong performance in the first quarter, NDE raised its earnings per share guidance for the full year of 2006. The company now projects profits between $5.00 and $5.40 per share, compared to its previous forecast between $4.50 and $5.20. NDE's pipeline of loans hit a record $10.4 billion at the end of the first quarter, up 39% year-over-year. This should bode well for the remainder of the year. The consensus earnings estimate for this quarter and next quarter jumped 11.8% and 8.0%, respectively, over the past 60 days. Profit forecasts for the full years of 2006 and 2007 rose 7.1% and 7.8%, respectively, over the same time period. Four analysts upped their estimates for this year, while three followed suit for next year. Those shareholders seeking additional income in the form of a dividend were pleasantly surprised when the Board of Directors at NDE recently increased its quarterly cash dividend by 21% to 46 cents per share. The company has a very impressive current dividend yield of 4.1%. NDE's five-year average dividend yield is 2.9%. When comparing the company's level of profitability, as measured by its return on equity, to that of the industry average, investors will be quite pleased. NDE's return on equity is more than twice that of the industry average-21% compared to 9%. 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. Blog Home

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(ZOLL) - Zoll Medical still going strong

Full Analysis ZOLL reported a 40% earnings surprise on Apr 28 for the March 2006 quarter. Sales were strong (up 11.2%) and income grew an astonishing 1,982%. Can ZOLL repeat the surprise when it reports the June 2006 quarter? History would certainly seem to be on the company's side, since it has only disappointed once in the last 17 quarters, including a run of positive earnings surprises the last three quarters in a row. Technical Analysis ZOLL was in a $25 - $28 trading range for most of the first half of 2006, breaking out to the upside on May 5. The stock has continued to gain in price and build volume since then, setting a new 52-week high last week at $31.95.Clearly this stock has been in a strong uptrend over the last month. Now that it's making new highs, it's clear that the stock has yet to find a price equilibrium. Why is it so important for Momentum traders to be buying stocks making new highs? Simply because stocks making new highs have no overhead resistance, thus little to slow further advances. Momentum traders realize that stocks breaking out to the upside are a clear graphical representation of supply and demand for a stock being out of balance. In addition, Momentum traders realize that most investors will not be willing to buy a stock making new highs, but will instead wait 'for a pullback' to establish new longs. This works to the Momentum trader's advantage three ways. First, they know that a trending stock is more likely to continue the trend than to reverse. Second, since most investors won't buy a stock making new highs, they know that there won't be so much competition to buy the stock. Finally, all those orders to buy below the market "on a setback" provide good support to prevent the very type of "pullbacks" that they are hoping to catch. In short, buying breakouts is investing in a stock at the very moment that it is most likely to yield a positive return. Background ZOLL Medical Corporation designs, manufactures and markets an integrated line of proprietary, noninvasive cardiac resuscitation devices, external pacemaker/defibrillators, disposable electrodes, mobile ECG Systems, and EMS data management solutions. The product line includes combination pacemaker/defibrillators, stand-alone pacemakers and defibrillators and disposable multi-function electrodes that permit cardiac monitoring, pacing and defibrillation through a single pair of electrodes. 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. Blog Home

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Weekly Update from The Spear Report, June 9, 2006

Detail "The trend is our friend," says the market adage. As we discussed last week, very simple trendlines on daily and weekly charts are a good way to gauge market trend. Trendlines are good for showing when normal patterns of price behavior have been broken. If the trendline has not been decisively broken on both daily and weekly timeframes, then we must presume some latent friendliness in the market, despite our natural emotional reaction to a sudden decline such as the one we have experienced for the last few weeks. Weekly charts are the most important, as they filter out short-term noise, and they should be looked at after the Friday close (not every day!). The weekly chart we posted of the Nasdaq in our TC2005 SpearNet club has critical trendline support around 2150 and it corresponds with the 1235 level in the S&P 500. Using a slight variation on that trendline technique, where we include the price extremes rather than simply draw the line from the weekly close, we get another key support level at 2100 for the Nasdaq. The good news is that these precise levels (2100 and 1235) were tested Thursday morning (6/8) and held, meaning that the Nasdaq bounced off of these levels and closed much higher. When markets test such important support, it is an emotional ordeal for many investors. Markets fall faster than they rise, which increases the potential for panic and pandemonium. Capitulation is the term used to describe the investor mindset that finally shouts, "Get me out at any price." It is a brief period of massive liquidation (high-volume selling). Just as euphoria can mark a top, capitulation marks an extreme negative mood that often sets the stage for an important reversal. The logic is simple: the vast majority of sellers have already sold, so selling pressure abates and only modest buying volume can then cause the market to rally. The market may have had just such a capitulation day Thursday (6/8). Most global bourses were down 2%-3% as Wall Street opened for business Thursday morning and a mood of pervasive negativity persisted throughout the morning. Meanwhile, the TSR Timing Model moved back down to zeropercent invested at Tuesday's close. An Update on the Falling BRICs In the past month, we have witnessed a synchronized global stock market correction, but one that has been unusually sharp in the bourses of the fastest growing economies, such as Brazil, Russia, India and China (the BRIC nations). Is the sudden and deep pullback in these markets forecasting a global recession? Is Wall Street going to be traumatized by another Asian crisis such as we had in 1997-98? These are important questions and our current answer to the first one is "No" and to the second one, "Probably Not." The BRICs are falling like bricks because they were all experiencing speculative excess, and corrections to bubble-like conditions are never pretty. Fundamentally, however, the emerging market countries are in much better shape than they were nine years ago, when an earlier boom phase turned into a crisis due to overvalued currencies, trade deficits and unstable banks and financial infrastructure. Today, the very active global forex (currency) markets have stress-tested most currencies, the economies of these countries have trade surpluses, little debt and are awash in cash, and local banking systems have responded well to international scrutiny by purging the system of nonperforming loans and curbing endemic cronyism. The massive oversubscription of China's recent financial IPOs is a case in point. In Japan, the world's second largest economy, credit growth is now running at its strongest pace in ten years, suggestive of the early stages of an economic expansion. That said, the proliferation of complicated derivative products used to leverage short-term trading strategies across many markets creates some uncertainty with respect to the global financial system and makes it vulnerable to a surprise dislocation. We don't believe this is a likely scenario, but it would be foolish to completely discount it, given the bubble-like conditions that are presently unwinding in various markets around the world. Our advice is to respect the simple uptrend lines and critical price levels we have discussed above in the U.S. indices and develop a plan to protect capital in the event of a decline below those levels. Meanwhile, you may not be aware of the fact that mutual funds experienced very little outflow during the 2000-2002 bear market. Institutional capital tends to stay invested and simply moves around from sector to sector as economic and market conditions change. Shifts in institutional allocation take place over many months. In bearish conditions, capital tends to rotate to defensive non-cyclical sectors such as consumer staples, healthcare and entertainment. We profile three companies representative of this trend below. Moreover, one can see from the paucity of the Buy List, which once again includes just two names out of an 899-name Consensus universe, that current market conditions are not favorable for most industries. Courtesy: http://www.spearreport.com/tour/performance.php Blog Home

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Stealth Stocks Weekly Update on Monday, June 12, 2006

Summary of Recommendations Remain largely defensive and mostly in cash as the stock market works out whether long-term primary supports are going to hold here or breakdown. Market Commentary Stocks drifted Monday as investors couldn't shake worries about rising interest rates ahead of a speech by Federal Reserve Chairman Ben Bernanke and key inflation reports due later this week. We are now at a very important crossroad, with major indexes approaching their monthly middle Bollinger Band lines, just ahead of Tuesday's release of the Producer's Price Index (PPI) and Wednesday's Consumer Price Index (CPI). I think it is pretty simple. If the CPI numbers show anything above 0.6%, on the top-line inflation number, long-term primary supports are likely to be violated. If we see moderation in the inflation report, long-term supports should hold and the market will attempt to build an intermediate-term bottom in deep oversold conditions. Be prepared that these numbers may not be all that bad, despite all the verbal Fed warnings of escalating inflation. My guess is the numbers may actually show an improvement. The economy is slowing and frankly, crude oil prices were lower in May than in April. It just wouldn't surprise me to see a slightly better outlook for inflation with this week's CPI report. Given rising fear among investors and the oversold conditions in the market, I think once the CPI report is out of the way (assuming the number isn't too bad), we could see short covering here at the monthly middle Bollinger Band lines and see a rally for a few weeks. However, it is clear the Federal Reserve wants to change the market's perception of its determination to fight inflation. I think it succeeded last week in getting their message out. But if commodity prices continue to climb, more interest rate hikes are going to come. We also have Bernanke speaking three times this week as well as other Fed governors. This group is now being called the Federal Open "Mouth" Committee (FOMC) and their incessant talk recently may help the indexes break primary supports and force more than just a correction. Let's talk about technical underpinnings of the stock market. There is no question that the technical condition of the market looks ugly. Breadth continues to deteriorate on all levels. Momentum is extremely weak, which has caused all the major indexes to violate their 200-day moving averages. Market leadership, which I consider to be one of the most important indicators, continues to show investors shunning anything with risk. The OTC indexes look extremely weak and I think this will continue as long as crude oil prices remain above $70 a barrel and the Fed continues their aggressive talk. However, before we declare a bear market and jump into short positions aggressively, I want you to consider this. Since 2003, there have been three other serious intermediate corrections, in similar magnitude and duration. This is the fourth correction. In each of these corrections the broad market has broken below the 200-day moving averages. But, and this is important, each time the monthly middle Bollinger Band line was tested and held above this major support. We are now at this point again, testing these long-term primary supports. For the Russell 2000 to break this support, the trend needs to breach 670, which is about 13 points lower than where is closed today. Until we see a technical breakdown of this support and a trend develop below the monthly middle Bollinger Band lines, we can't rule out the ability of the bulls to regroup. If primary support holds here and inflation moderates, this could be a key buying opportunity - but I don't know that yet. However, this week should determine whether this is another correction or a bear market with some legs to it. Courtesy: www.stealthstocksonline.com Blog Home

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Pricing Remains Favorable for Big Hotels

With Matt Quinn, Jun 12, 2006 With the summer months now upon us and many investors entertaining thoughts of taking a vacation this season, we felt it would be a good time to check in with Matthew P. Quinn, CFA, senior travel and leisure analyst for Zacks Equity Research. We spoke with him specifically about the hotel industry. What is new with the hotel companies since your last update in early March? In late April and early May, all four of the hotel companies in our coverage reported financial results for the first quarter of fiscal year 2006. The three largest - Hilton Hotels Corporation (HLT), Starwood Hotels & Resorts (HOT) and Marriott International (MAR) - all continue to expect revenue per available room (REVPAR) growth in North America to be between 8% and 10% in 2006. We believe about three-quarters of REVPAR growth in 2006 will come as a result of higher pricing. This outlook is supported by data compiled by Smith Travel Research, which shows that REVPAR increased by approximately 9% through the first quarter of the year and 10% in May 2006 versus May 2005. Through the first quarter of 2006, higher average daily rates (ADR) accounted for about 74% of the growth in REVPAR. Are there any updates you can give us on expansion and marketing plans by the major hotel chains? As far as expansion is concerned, Hilton has the largest development pipeline by far, with 700 hotels featuring 100,000 rooms and suites (21% growth). This follows the close of its acquisition of Hilton Group, plc in the first quarter of 2006. The company continues to experience strong conversion-related demand for its full service Doubletree and Hilton brands, and franchise development demand for its Hampton Inn and Hilton Garden Inn limited-service brands. In particular, Hampton Inn has significant momentum at present. Hampton's growth has accelerated over the past few years as the company has established a national footprint for the limited-service, moderately priced hotel chain. Hilton has spent considerable time and effort to reinvent the brand, including its ‘Make it Hampton' initiative, which had begun in 2004. Over the past few years, Hampton has introduced new products and services, including hot breakfasts, new bedding and high-speed Internet. We expect the company to develop in excess of 100 Hampton properties annually over the next two years as the brand further penetrates urban markets and the western U.S. and expands internationally. This compares with the roughly 40 franchised Hilton Garden Inn properties the company adds to its portfolio annually. We note that both brands have won the JD Power award for ‘Highest Customer Satisfaction' within their respective categories for multiple years running, which enhances value for existing and potential franchisees. The company also continues to develop its new luxury brand, The Waldorf-Astoria Collection, which currently features four of the company's properties. At the end of May, we note that Hilton announced plans for its fifth Waldorf-Astoria, and the first newly built Waldorf-Astoria since the original was built in New York City. The newly developed Waldorf-Astoria will be built near the Walt Disney World Resort in Orlando, Florida. We expect the company to extend the brand to other select Hilton and Conrad branded hotels in the coming year, and the brand could be extended to as many as 50 hotels over the long term. Starwood had 260 hotels with 76,000 rooms (29% growth) in its development pipeline at the end of March, half of which are located internationally. However, the company will add only 14,000 rooms to its portfolio in 2006. This lower growth comes on the heels of the acqusition of the Le Meridien brand in late 2005, which added 120 high-end hotels to the company's global portfolio, and will contribute an estimated $45 million in fees in 2006. In terms of marketing, Starwood continues to position its various hotel brands to meet the specific demands of targeted market segments. Although this is nothing new in the hotel industry, Starwood has done a tremendous job with brand differentiation over the last several years. We believe this has allowed the company to increase market share and maintain a leading position in the luxury/upscale market. Starwood and other hotel companies have also introduced new concepts within the last few years. What is the reasoning behind the new concepts, and how do you think they will impact their respective owners? New brands under development, such as aloft (lower-case “a”) by Starwood and Cambria Suites by Choice Hotels, focus primarily on extending the franchise business into the upper end of the select service lodging market. Starwood is hoping that the popularity of its W Hotel chain will translate into the success of a new boutique-type hotel at a lower price point. Cambria will focus more attention to details and design than other select service hotels and hopes to primarily attract business customers to its commercial, airport and leisure destination locations. This trend towards growing franchise opportunities at higher price points is not surprising, given that higher-end properties within each market segment have seen REVPAR grow at above-average rates during the last few years. Another relatively new brand is the Indigo Hotel, which was brought to market by Intercontinental Hotel Group (IHG) in 2004. IHG's focus is style-conscious business travelers with its boutique Indigo Hotel brand, which is clearly differentiated from its Holiday Inn and Express brands. Starwood is also working on ‘Project ESW', which is expected to introduce 25 new agreements per year over the next five years, for an upper-scale extended-stay product as an extension of its Westin brand. None of the new brands will be significant contributors to their respective companies for a number of years given the substantial property portfolios each already has established. That being said, Starwood recently reinforced its commitment to have 500 aloft hotels by 2015, and noted that 30 aloft-related deals are now in the application stage. What are your top Buy recommendations at the present time? I continue to favor Hilton Hotels (HLT) and Starwood (HOT) for many of the reasons mentioned above. Asset sales by both companies have allowed them to focus more on managing their unique brands and growing their vacation ownership businesses. Acquisitions have also allowed both companies to extend the worldwide reach of their brands and to expand into other markets. Both are also well positioned to continue to benefit from favorable demand trends in major urban markets. Given rising interest rates, increased property values, and ever-higher costs for construction and raw materials, there are not a lot of new hotels coming on line in major markets. In fact, hotels are actually coming out of the market in certain areas in favor of condo development. As owners and operators of upscale properties in major urban markets, we believe Hilton and Starwood are well positioned to continue raising room rates, which we believe will allow them to continue to outperform the broader lodging industry. Matthew P. Quinn, CFA is a senior equity analyst covering the hotels, travel and leisure sectors 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. Content Courtesy: Zacks Investment Research Blog Home

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(GRR) - (IFN) - (MXF) - International ETF's - ETF Investor newsletter

Jack Colombo, editor of the ETF Investor newsletter, explains how correlation of securities are measured. Then he details the inter-correlations between various Exchange Traded Funds (ETF's). Find out what this expert's findings revealed and benefit from his insight. Afterward, take a look at some of the best performing international ETF's. Market Correlation from May 24 Correlation is a statistical measure of how two securities move in relation to each other. The highest positive correlation is 1, meaning a perfect positive relation between two securities, they move together. The highest negative correlation is -1, meaning the securities move very predictably in opposite directions. It is notable that such high correlations are hardly ever observed in nature A correlation of zero means there is no relation whatsoever between the securities. Prudent investment involves building a portfolio of securities with low and even negative correlations on the theory that the best long-term portfolio performance will be obtained by not over reaching to predict winners and losers. A portfolio of securities with low correlation is therefore, not dependent on any one economic event. Inflation, housing, consumer spending, capital spending, balance of trade; all have varying effects on different industries. The goal of indexed based investing is to balance these risks with a measured bias toward the most likely current economic scenario. To do this, however, you need to know the relative inter-correlation of what you currently own. In short, you get no benefit from diversifying over a half dozen indexed ETF's if their correlation is high. Jack Colombo and his team recently reviewed the inter-correlations between ETF's across different types of iShare funds. The review revealed some interesting findings. The correlation between the iShares S&P 500 (IVV) fund was almost perfectly correlated with their S&P 1,500 Index fund (ISI); in fact, the correlation was reported as perfect, that is 1. In essence there is no difference in the performance between the S&P 500 and S&P 1500. Investors seeking diversity by investing in these two funds would receive none. In fact, 23 iShare funds correlate with the S&P 500 by more than .90, which means the performance you can expect from them is virtually identical. Again, investors seeking diversity should buy only one of at least 23 separate iShare funds to gain meaningful diversification. The Russell 1,000 and 3,000 index funds, even when including their offshoot growth or value sub-indexes, are correlated with the S&P 500 by a coefficient of greater than .96. Therefore, all six of these funds offer little diversification in relation to the S&P 500. Some other interesting correlations; the S&P SmallCap 600 Value Index Fund is correlated with S&P 500 with a coefficient of .87. Even sector funds show surprisingly high correlations with the S&P 500 fund, such as the Dow Jones U.S. Financial Services Index Fund (IYG), which has a correlation of .85. Looking overseas, the S&P Latin America 40 Index Fund has a correlation of .62 with the S&P 500. It's not until European stocks are considered that the correlation drops much below .50. The one ETF that has absolutely no correlation with S&P 500 is the Lehman 20+ Year Treasury Bond Fund (TLT), with a correlation of 0. There are no significant negative correlations found among all the U.S. iShares ETF's. The U.S. market seems to respond as a whole to economic factors and these factors affect the majority of U.S. equities. It's understandable that U.S. markets may move together, after all, equities respond to the U.S. economy. The surprising aspect to this correlation analysis is that there are no negative correlations between U.S. ETF's and foreign ETF's. Therefore, markets worldwide are responding to the same underlying economic factors, at least in terms of the directionality of their movements. That's what globalization gets you! The interesting part is choosing the ETF's that provide the highest return. After all, even a correlation of .90 leaves the possibility of .10 in extra returns. Investors seeking to achieve market performance through ETFs can hardly go wrong picking any of the broad based indexed funds, but they would be wrong to think that this has also given them protection against total market direction swings. They will have to go beyond ETFs to achieve this and that means diversification into income securities. International ETF's A sampling of the best performers: Asia Tigers, Inc. (GRR) is a non-diversified, closed-end management investment company. They seek long-term capital appreciation thru investments in the equity securities of Asian (non-Japanese) companies. India, Inc. (IFN) is a non-diversified, closed-end management investment company. Mexico Fund. Inc. (MXF) is a diversified, closed-end management investment company which seeks long-term capital appreciation through investment in securities, primarily equity, listed on the Bolsa Mexicana de Valores, S.A. de C.V. Investment Advisor: Impulsora del Fondo Mexico, S.A. de C.V. Advisory Agreement: The Adviser furnishes investment research and portfolio management services consistent with the Fund's stated investment policies. Content Courtesy: Zacks Investment Research Blog Home

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