(KFI) - fourth straight quarter in which the company beat the Street's earnings estimate

K&F Industries Holdings, Inc. (KFI), a Zacks #1 Rank stock, topped analysts' earnings expectations for the past four quarters by an average margin of 13.8%. After posting solid results for the second quarter and first six months of 2006, the company revised its revenue, EBITA and earnings per share guidance upward. KFI has a price-to-book ratio of only 1.9, compared to 4.0 for the market. Full Analysis K&F Industries Holdings, Inc. designs, develops, manufactures and distributes wheels, brakes and brake control systems for commercial transport, military and general aviation aircraft. The company also produces aircraft fuel tanks, de-icing equipment and coated fabrics for environmental, storage and transport applications. When KFI reported its financial results for the second quarter on Aug 8, it marked the fourth straight quarter in which the company beat the Street's earnings estimate. Profits for the quarter came in at 28 cents per share, beating the consensus estimate by 12%. Revenues advanced 13.7% to $102.7 million. For the first six months of the year, profits amounted to $21.6 million, compared to $3.9 million for the first six months of 2005. Revenues jumped 8.2% to $193.7 million. President and CEO Kenneth M. Schwartz stated, "2006 continues to progress towards a record year for sales, bookings and adjusted EBITDA." As a result, the company raised its 2006 guidance and now expects revenues between $415 million and $423 million, EBITDA between $162 million and $166 million and earnings per share between $1.24 and $1.29. The company's previous forecast called for revenues between $408 million and $415 million, EBITDA between $160 million and $163 million and earnings per share between $1.22 and $1.27. Analysts have grown increasingly optimistic due to KFI's second-quarter results and bullish outlook. The consensus estimate for this year currently sits at $1.27 and represents a 4.1% increase when compared to the consensus of a week earlier. Profit forecasts for next year jumped by an even great magnitude--9.0% to $1.45. The company is currently trading at a discounted valuation of 13.4x trailing 12-month and current fiscal-year earnings. The market, as represented by the S&P 500, is trading at a valuation of 16.0x trailing 12-month earnings and at 15.3x its current fiscal-year estimated earnings. The company has a price-to-book ratio of only 1.9, compared to 4.0 for the market. KFI's return on equity of 14% is in line with the industry average. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. 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| VitalStocks Home

Click for full article

(HCC) - Revenues were up, advancing 22.3% - Board of Directors authorized a 33% increase in the company's annual dividend

HCC Insurance Holdings, Inc. (HCC) has a history of beating the Street's earnings estimates, having done so for the past 10 quarters. Consensus estimates for this quarter and full-year 2006 have increased over the past week. This Zacks #1 Rank stock raised its dividend in late May and is currently yielding 1.3%. Full Analysis HCC Insurance Holdings, Inc. provides property and casualty, surety, group life and accident and health insurance products. The company also offers related agency and reinsurance brokerage services. HCC operates in the United States, the United Kingdom, Spain, Ireland and Bermuda. HCC exceeded analysts' earnings expectations in 10 straight quarters, and in 13 out of the past 14. Earnings per share grew 25% over the past five years and are forecasted to grow 17% over the next 3-5 years. The industry is expected to grow at a 12% clip. On Aug 3, HCC beat the Street's estimate by a solid 14.9% with earnings per share of 77 cents. The company posted profits of 59 cents in the prior-year period, marking a 30.5% year-over-year improvement. Total revenues increased 21.8% to $493.2 million. For the first half of 2006, profits soared 38.4% to $168.0 million. Revenues were also up, advancing 22.3% to $959.3 million when compared to the first six months of 2005. The company credited growth of earned premium to its increased retentions. Furthermore, Chairman and CEO Officer Stephen L. Way stated, "We continue to produce record results with a strong balance sheet and we are confident about our future performance." HCC announced recently that it will purchase the Health Products Division of Allianz Life Insurance Co. of North America for $140 million in cash. Pending regulatory approval, the transaction is expected to be finalized by the end of the third quarter of 2006. The Health Products Division, which has been operating for 30 years and is based in Minneapolis, currently writes over $300 million in annual gross premium. Once the deal is approved, HCC's Life unit will write more than $750 million in annual premiums. The company also acquired G.B. Kenrick & Associates, Inc. on Jul 13 and Novia Underwriters, Inc. on Jun 30, both for undisclosed considerations. Kenrick is recognized as one of the premier underwriters of municipal insurance, while Novia specializes in medical stop loss insurance. The consensus estimate for this quarter currently sits at 69 cents and represents a 6.2% increase when compared to the consensus of a week earlier. Profit forecasts for the full year of 2006 jumped 4.1% to $2.80 over the same period of time. Two analysts upped their estimates for this quarter while three did so for the full year. On May 24, the Board of Directors authorized a 33% increase in the company's annual dividend to 40 cents per share. The company is currently yielding 1.3% and has a five-year average dividend yield of 0.99%. HCC�s return on equity tops that of the industry average�15% compared to 12%. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. 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| VitalStocks Home

Click for full article

(MNT) - earned 33 cents per share in this year's quarter, 18% above estimates

Mentor Corporation has exceeded analyst expectations in six out of the past seven quarters, with three of them surprising by double-digits. Two analysts have raised their numbers for this year, while one has done so for next year. Over the past 30 days, this year's estimates have increased 3.5% to $1.17 per share, while next year's numbers have jumped 9.5% to $1.50 per share. The stock is currently trading at 30.4x next year's estimates, above the projected long-term growth rate of 17%, giving the stock a PEG ratio of 1.79. Full Analysis Mentor Corporation (MNT) engages in the development, manufacture, and marketing of various products serving the aesthetic medicine market in the United States. It offers breast implants, body contouring, and other aesthetics, which includes facial aesthetics products. The company develops, produces, and markets various breast implants, including saline-filled implants and silicone gel-filled implants; body contouring products, including liposuction products and disposable supplies; and Puragen, a nonanimal-based hyaluronic acid dermal filler. It also provides offers software, consulting, and business management tools for plastic surgeons. MNT reported a strong fiscal first-quarter earnings report. Mentor said it earned 33 cents per share in this year's quarter, 18% above estimates. Net sales grew 7 percent to $79.4 million from $74.1 million. Looking ahead, Mentor reaffirmed its full-year revenue guidance of between $290 million and $305 million. Wall Street is looking for sales of $300.5 million. "During the quarter we recorded solid operating results as we continued to grow our core breast, facial, and body aesthetics business," commented Joshua H. Levine, President and Chief Executive Officer of Mentor. "Following the successful divestiture of Mentor's urology business this quarter, we began to restructure our operations to rationalize our corporate infrastructure and improve our efficiency and profitability. We see significant opportunities for growth and are confident that our pure-play position in aesthetic medicine will drive long-term shareholder value." The company is exploring potential acquisitions, strategic alliances or licensing deals that would help it expand its reach in the cosmetic procedures industry. The CEO said that his focus is on products that are on the market or in late-stage clinical development. Mentor has exceeded analyst expectations in six out of the past seven quarters, with three of them surprising by double-digits. Two analysts have raised their numbers for this year, while one has done so for next year. Over the past 30 days, this year's estimates have increased 3.5% to $1.17 per share, while next year's numbers have jumped 9.5% to $1.50 per share. The stock is currently trading at 30.4x next year's estimates, above the projected long-term growth rate of 17%, giving the stock a PEG ratio of 1.79. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. 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| VitalStocks Home

Click for full article

(CRYP) - Over the past five quarters, exceeded analysts' expectations by an average of 15.4%

CryptoLogic, Inc. (CRYP), a Zacks #1 Rank stock, beat the Street's earnings estimate in the past five quarters by an average margin of 15.4%. Earnings per share are expected to grow 20.0% over the next 3-5 years. Consensus estimates for this year and next are trending higher. The company is currently yielding 2.2% and has a return on equity of 31%, compared to 3% for the industry average. Full Analysis CryptoLogic, Inc. is a software developer in the Internet gaming industry. The company's complete online gaming lineup includes more than 150 casino table and slot games, player-to-player poker and multi-player bingo. CRYP also provides licensing, e-cash management and customer support services. Over the past five quarters in which CRYP exceeded analysts' earnings expectations it did so by an average margin of 15.4%. Earnings per share grew 18.1% over the past five years are expected to grow by a greater magnitude going forward—20.0% over the next 3-5 years. On Aug 3, CRYP beat the Street's estimate by a solid 25.5% when it reported second-quarter profits of $8.2 million, or 59 cents per share. Profits in the prior-year period came in at $4.8 million, or 33 cents per share. Revenues ballooned 52.8% to $30.4 million. President and CEO Lewis Rose stated, "CryptoLogic's new casino games went head-to-head with the World Cup and warm weather—and won. Our Q2 revenue and earnings were far ahead of expectations and surpassed our results in Q1 2006, which is typically a stronger quarter." During the quarter, the company launched 11 innovative new casino games. For the first six months of the year, profits and revenues rose 65.6% and 42.5%, respectively, when compared to the first six months of 2005. The company increased revenues and grew profits for the past three years, most recently by 35.5% and 49.6%, respectively, in 2005. Consensus estimates for this year jumped 10.5% over the past seven days. Profit forecasts for next year have risen 8.8% over the past week. The Board of Directors declared a quarterly cash dividend of 12 cents per common share of stock on Aug 1. CRYP has a current dividend yield of 2.2%. The company is currently trading at a discounted valuation of 11.2x trailing 12-month earnings and at 10.4x 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 15.4x its current fiscal-year estimated earnings. The company has a price-to-book ratio of 3.3, compared to 4.0 for the market. CRYP's level of profitability, as measured by its return on equity, absolutely obliterates the industry average. The company has a ROE of 31%, compared to 3% for the industry. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. 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| VitalStocks Home

Click for full article

(SUN) - earnings expectations in seven out of the past nine quarters by an average margin of 19.8%

Sunoco, Inc. (SUN), a Zacks #1 Rank stock, topped the Street's earnings expectations in seven out of the past nine quarters by an average margin of 19.8%. Consensus estimates are on the rise for this quarter and the full year of 2006. The Board of Directors recently approved a quarterly dividend of 25 cents per share and a $500 million increase to its share repurchase program. SUN has a return on equity of 57%, compared to 32% for the industry average. Full Analysis Sunoco, Inc. manufactures and markets various petroleum products, including fuels, lubricants and some petrochemicals in the United States. The company operates in five segments: refining and supply, retail marketing, chemicals, logistics and coke. SUN exceeded analysts' earnings expectations in seven out of the past nine quarters by an average margin of 19.8%. The company's most recent positive surprise came on Aug 2, when SUN reported second-quarter profits of $426 million, or $3.22 per share. The Street was projecting $2.63 per share. In the prior-year period, the company posted profits of $242 million, or $1.75 per share. Revenues jumped 32.5% to $10.6 billion. Chairman and Chief Executive Officer John G. Drosdick stated, "Strong refining margins, particularly for ethanol-blended gasoline and low-sulfur diesel products, led to record quarterly earnings." For the first six months of 2006, SUN grew profits by 41.1% to $505 million, while revenues increased 26.3% to $19.2 billion. Earnings per share are forecasted to grow 12.2% over the next 3-5 years. The consensus earnings estimate for this quarter currently sits at $2.77. This represents a 23.7% increase over the past 90 days. For the full year of 2006, profit forecasts climbed 13.2% to $8.21 over the same period of time. On Jul 6, the Board of Directors announced a quarterly cash dividend of 25 cents per common share of stock, payable Sep 8, to shareholders of record as of Aug 8. The company is currently yielding 1.3% and has a five-year average dividend yield of 2.1%. Furthermore, the Board authorized an increase in the company's share repurchase program by an additional $500 million. SUN has approximately $109 million remaining on its previous $500 million program approved in March 2005. SUN increased revenues for the past seven years, while expanding margins and growing profits for three years running. The company's return on equity, a common measure of profitability, blows away the industry average--57% compared to 32%. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. 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| VitalStocks Home

Click for full article

(CXW) - Strong Long-Term Hold - privatized correctional and detention facilities - Corrections Corporation of America

Corrections Corporation of America has exceeded earnings estimates for four consecutive quarters. All four analysts raised their estimates for this year. Over the past week, this year's estimates have increased 5.7% to $2.40 per share, while next year's numbers have also jumped 5.7%. The stock is trading at 22.1x next year's estimates, slightly above the projected long-term growth rate of 20%, giving the stock a PEG ratio of 1.10. Full Analysis Corrections Corporation of America (CXW) engages in the ownership and operation of privatized correctional and detention facilities in the United States. It designs, builds, and manages prisons, jails, and detention facilities, as well as provides inmate residential and prisoner transportation services. The company's facilities offer various rehabilitation and educational programs, including basic education, religious services, life skills and employment training, and substance abuse treatment. Corrections Corporation also provides healthcare services, including medical, dental, and psychiatric services; food services; and work and recreational programs. It serves federal, state, and local correctional and detention authorities. CXW reported robust second-quarter earnings. For the three months ended June 30, 2006, the Company reported net income of $25.6 million, or 63 cents per share, compared with net income of $14.9 million, or 37 cents per share, for the 2005 comparable period, an increase of 70.3% per share. Analysts had expected 57 cents per share. Total revenue for the second quarter of 2006 increased 12.4% to $326.2 million from $290.2 million during the same period in 2005, as total compensated man-days increased to 6.1 million from 5.7 million, and as revenue per compensated man-day increased to $52.51 from $50.31, an increase of 4.4%. Average compensated occupancy for the three months ended June 30, 2006 increased to 94.8% from 90.1% for the three months ended June 30, 2005. Commenting on the Company's financial results, President and CEO John Ferguson stated, "We are very pleased with our second quarter financial results as our earnings benefited from higher than expected inmate populations at a number of key facilities. Our margins also improved due to leveraging fixed costs over higher inmate populations." The company has exceeded earnings estimates for four consecutive quarters. All four analysts raised their estimates for this year. Over the past week, this year's estimates have increased 5.7% to $2.40 per share, while next year's numbers have also jumped 5.7%. The stock is trading at 22.1x next year's estimates, slightly above the projected long-term growth rate of 20%, giving the stock a PEG ratio of 1.10. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. 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| VitalStocks Home

Click for full article

(WIRE) - Earnings Momentum - company kept streak intact, crushing the Street's estimate with a 167.8% upside surprise

Encore Wire Corporation (WIRE), which was first presented as a Value stock on May 23, continues to trade at a discounted valuation. The company beat the Street's earnings estimate for the past five quarters, most recently by an eye-popping 167.8%. Consensus estimates have been shooting upward for this Zacks #1 Rank stock. The company has a return on equity of 59%, compared to the industry average of 18%. Full Analysis Encore Wire Corporation manufactures copper electrical building wire and cable in the United States. The company supplies both residential and commercial wire. WIRE also purchases small quantities of other types of wire to resell to the customers that buy its products. When WIRE was first featured as a Value stock on May 23, it had exceeded analysts' earnings expectations in four consecutive quarters. On Jul 25, the company kept this streak intact by absolutely crushing the Street's estimate. WIRE reported second-quarter profits of $2.41 per share--equating to an astounding 167.8% positive surprise. Its year-over-year improvement was even more mind-boggling, with the company's earnings in the prior-year period amounting to 10 cents per share. Net sales soared 113.8% to a record $362.0 million, thanks mainly to higher wire prices. For the first six months of the year, net sales rose 100.4% to $614.1 million. Profits came in at $73.2 million, compared to $3.5 million in the first six months of 2005. The company increased revenues for the past four years while expanding gross margins and growing profits for the past three. To say that consensus estimates have been trending higher would be an understatement. Profit forecasts for this quarter and next quarter ballooned 108.0% and 116.4%, respectively, over the past 30 days. Analysts' projections for this year and next skyrocketed 103.0% and 80.6%, respectively, over the past month. Despite the company's earnings surprises and estimate revisions, it continues to trade at a discounted valuation of only 7.1x trailing 12-month earnings and at 5.9x 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 15.5x its current fiscal-year estimated earnings. The company has a price-to-book ratio of 3.7, compared to 4.0 for the market. WIRE's level of profitability, as measured by its return on equity, not only tops the industry average but absolutely destroys it. The company has a ROE of 59%, compared to 18% for the industry. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. 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| VitalStocks Home

Click for full article

(SLB) - Top Stock Pick Schlumberger exceeded analysts' earnings expectations for the past seven quarters

Schlumberger Limited (SLB), a Zacks #1 Rank stock, topped the Street's earnings estimate for seven straight quarters by an average margin of 9.5%. Earnings per share are projected to grow 22.7% over the next 3-5 years. Consensus estimates have been trending higher. SLB has a current dividend yield of 0.75% and a five-year average dividend yield of 1.3%. Full Analysis Schlumberger Limited is an oilfield services company, operating under two segments, Schlumberger Oilfield Services and WesternGeco. SLB exceeded analysts' earnings expectations for the past seven quarters by an average margin of 9.5%. Earnings per share grew an impressive 28.1% over the past five years and are forecasted to grow 22.7% over the next 3-5 years. On Jul 21, the company beat the Street's second quarter earnings estimate by 15.9% when it reported profits of 73 cents per share. When compared to the 39 cents earned in the prior-year period, earnings soared 87.2%. Operating revenues climbed 36.7% to $4.69 billion. Split up by business segment, oilfield services jumped 35.9% while WesternGeco revenue rose 46.7%. Looking ahead, SLB sees continued strong sequential growth rates for the remainder of 2006, especially in the Eastern Hemisphere. Analysts are also optimistic about the company's future earnings potential. Consensus estimates for this quarter and next have risen 8.7% and 6.7%, respectively, over the past 30 days. Nine analysts upped their estimates for both quarters. Profit forecasts for this year and next jumped 6.4% and 4.9%, respectively, over the same period of time and reflect upward revisions by nine analysts as well. The Board of Directors recently declared a quarterly dividend of 12.5 cents per share. The dividend is payable on Oct 6 to stockholders of record as of Sep 6. SLB has a current dividend yield of 0.75% and a five-year average dividend yield of 1.3%. SLB announced a new 40 million-share repurchase program in the first quarter of 2006. During the second quarter, the company repurchased 3.6 million shares for a total amount of $213 million. SLB's return on equity exceeds that of the industry average—35% compared to 23%. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. 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| VitalStocks Home

Click for full article

(FOXH) - Earnings of two cents/share blew away consensus of a loss of 14 cents/share

Foxhollow Technologies has dramatically exceeded earnings estimates for six quarters in a row. Five analysts have raised their numbers for both this year and next. Earnings estimates have significantly jumped over the past week. This year's numbers have gone from a loss of seven cents to a profit of 29 cents per share over the past seven days. Similarly, next year's estimates have risen nine cents to 85 cents per share. Full Analysis Foxhollow Technologies, Inc. (FOXH) engages in the design, development, manufacture, and sale of medical devices primarily for the treatment of peripheral artery disease. The company sells the SilverHawk Plaque Excision System, a minimally-invasive single-use catheter system designed for removal of plaque from arteries. It markets its product through its direct sales force in the United States primarily to interventional cardiologists, as well as to vascular surgeons and interventional radiologists. The company has collaboration agreement with Merck & Co., Inc., that would focus on analyzing atherosclerotic plaque removed from patient arteries as a means of identifying new biomarkers of atherosclerotic disease progression for use in the development of cardiovascular compounds in Merck's pipeline. The young company reported its first profitable quarter during the second quarter of 2006. Earnings per share of two cents blew away the consensus estimates which called for a loss of 14 cents. FOXH reported revenue of $48.2 million, a 68% increase over revenue of $28.7 million in the same period a year ago. "This was a milestone quarter for FoxHollow for a number of reasons, including our first quarter of profitability on a GAAP basis. Our financial performance speaks to increased adoption of the SilverHawk and growing confidence in the medical community that plaque excision is a valuable and important addition to the treatment options for PAD," noted Dr. John Simpson, who was named chief executive officer during the second quarter. FOXH has dramatically exceeded earnings estimates for six quarters in a row. Five analysts have raised their numbers for both this year and next. Earnings estimates have significantly jumped over the past week. This year's numbers have gone from a loss of seven cents to a profit of 29 cents per share over the past seven days. Similarly, next year's estimates have risen nine cents to 85 cents per share. The stock is currently trading at 34x next year's estimates of 85 cents per share, slightly above the company's projected long-term growth rate of 28.33%, giving the stock a PEG ratio of 1.20. This is quite reasonable for a company with such explosive growth prospects. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. 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| VitalStocks Home

Click for full article

(CI) - Top Stock Pick - Workplace Healthcare Services Provider - CIGNA Corporation

CIGNA Corporation (CI) exceeded the Street's earnings estimate in 15 consecutive quarters, most recently by 20.3%. The company increased its share repurchase program by $500 million to $790 million, and declared a quarterly dividend on Jul 26. This Zacks #1 Rank stock has a price-to-book ratio of 2.4, compared to 4.0 for the market. Full Analysis CIGNA Corporation, through its subsidiaries, provides healthcare and related benefits offered through the workplace. The company offers healthcare products and services, group disability, life and accident insurance, and disability and workers' compensation case management and related services. CI's history of exceeding analysts' earnings expectations is truly remarkable. The company topped the Street's estimate in the past 15 quarters by an average margin of 21.4%. On Aug 2, CI posted second-quarter profits of $2.31 per share, which beat analysts' forecasts of $1.92. Compared to the prior-year period, earnings were up a solid 16.7%. Consolidated revenues came in at $4.1 billion-flat when compared to the second quarter of 2005. The company expects 2006 consolidated adjusted income from operations between $960 million and $1.02 billion, or $8.30 to $8.80 per share. CI previously projected between $7.50 and $8.00. CI's earnings per share are forecasted to grow 11% over the next 3-5 years. The industry is expected to grow by 10%. Over the past 30 days consensus estimates for this quarter and next jumped 6.4% and 3.9%, respectively. Five analysts upped their forecasts for this quarter while six did so for next quarter. Profit forecasts for this year and next have risen 7.4% and 3.6%, respectively, over the same period of time. Upward revisions for this year were submitted by four analysts while six followed suit for next year. On Jul 26, CI announced that it has increased its stock repurchase authority by $500 million to $790 million. Furthermore, the company also declared a quarterly dividend of 2.5 cents per share, payable Oct 10 to shareholders of record as of Sep 11. CI is currently trading at a discounted valuation of 12.6x trailing 12-month earnings and at 12.1x 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 15.5x its current fiscal-year estimated earnings. The company has a price-to-book ratio of 2.4, compared to 4.0 for the market. CI's level of profitability, as measured by its return on equity, exceeds that of the industry average-19% compared to 12%. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. 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| VitalStocks Home

Click for full article

(ICOS) - Stock Review - Therapeutic Product Biotechnology - ICOS Corporation

ICOS Corporation has exceeded analyst estimates in each of the past three quarters by at least 88%. Five analysts have raised their numbers for this year, while three have done so for next year. Earnings estimates have been dramatically rising. Over the past 60 days, next year's numbers have almost doubled to 51 cents per share from 27 cents. Full Analysis ICOS Corporation (ICOS) is a biotechnology company that develops innovative therapeutic products to treat serious unmet medical conditions such as benign prostate hyperplasia, cancer and inflammatory diseases. It derives revenue largely from partnering agreements with other organizations for research, development and marketing purposes. The primary alliance partners of ICOS include Solvay Pharmaceuticals, Eli Lilly and Biogen-IDEC. ICOS' first commercial product, Cialis, has gained significant market share in ED. Cialis is an oral inhibitor of the phosphodiesterase type-5 enzyme (PDE-5). Cialis is manufactured and marketed by Lilly-ICOS, LLC, the company's 50-50 joint venture with Eli Lilly and Company. Through Lilly-ICOS, the companies have joint responsibility for the promotion, sale and distribution of Cialis in North America and Europe. Cialis market share is double that of Levitra and gaining quickly on market leader Viagra. In fact, the drug is the category leader in eleven countries around the world, including France, Portugal, Saudi Arabia, U.A.E., South Africa, and Venezuela. Cialis could eventually capture over 30% of the total ED market worldwide. One of the biggest potential growth drivers for Cialis will be the allowance for once-daily dosing. Lilly-ICOS filed a supplemental marketing authorization application (MAA) in the E.U. on June 7, 2006 seeking approval for a oncedaily dose with the 2.5mg or 5.0mg tablet. Once-daily dosing could be a significant prescription driver if approved. The company has exceeded analyst estimates in each of the past three quarters by at least 88%. Five analysts have raised their numbers for this year, while three have done so for next year. Earnings estimates have been dramatically rising. Over the past 60 days, next year's numbers have almost doubled to 51 cents per share from 27 cents. The stock is attractively priced given its explosive growth prospects. ICOS is currently trading at 44.8x next year's estimates of 51 cents per share, well below the projected long-term growth rate of 84%, giving the stock a PEG ratio of 0.53. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. 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| VitalStocks Home

Click for full article

(GR) - Top Stock Pick in Defense and Homeland Security - Goodrich Corporation

Goodrich Corporation (GR) beat the Street's earnings estimate in 10 out of the past 12 quarters. Earnings per share are projected to grow 14.0% over the next 3-5 years. The company recently raised its 2006 revenue guidance after releasing solid results for the second quarter. This Zacks #1 Rank stock is currently yielding 2.0% and its return on equity exceeds that of the industry average-16% compared to 14%. Full Analysis Goodrich Corporation is a global supplier of systems and services to the aerospace, defense and homeland security markets. The company has three business segments: airframe systems, engine systems and electronic systems. During the past 12 quarters, GR exceeded analysts' earnings expectations on 10 occasions with an average margin of 19.5%. Earnings per share are projected to grow 14.0% over the next 3-5 years. On Jul 27, the company surprised to the upside by 4.9% when it posted second-quarter earnings per share of 64 cents. In the second quarter of 2005, GR reported profits of 51 cents per share. Revenues jumped 9.6% to $1.48 billion. The company cited increased demand for commercial airplane original equipment and aftermarket products as fueling its revenue growth. In mid June, Airbus announced that deliveries of its new A380 jetliner would be delayed. GR supplies a wide range of parts for the A380, including landing gear, evacuation slides, lighting, cargo systems and other structural components. However, Chairman, President and Chief Executive Marshall Larsen said the delay had no significant impact on the company's second-quarter results and he expects the delay to have a "negligible impact" on income this year or in 2007. Investors' fears were pacified when GR raised its 2006 sales guidance to between $5.75 billion and $5.85 billion, compared to its previous outlook between $5.6 billion and $5.7 billion. Analysts' estimates have been on the rise for both this year and next. Profit forecasts for this year are up 3.5% over the past 60 days. Looking ahead to next year, analysts increased their estimates by 3.8% over the same period of time. Upward revisions were submitted by seven analysts for 2006 and 2007. On Jul 25, the Board of Directors approved a quarterly cash dividend of 20 cents per share of common stock. The dividend is payable Oct 2 to shareholders of record as of Sep 5. GR has a current dividend yield of 2.0%. The company's return on equity exceeds that of the industry average-16% compared to 14%. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. 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| VitalStocks Home

Click for full article

Stock Strength Continues in Lodging Sector - Buy on United Dominion (UDR) & Inkeepers USA Trust (KPA)

As Q2 earnings continue this week, we have checked in with real estate investment trust (REIT) senior analyst Greg Sukenik, who will let us know his take on which areas of real estate might still have some good investment options. Though many have turned bearish on the housing market in general, several of your REITs are still Buy-rated. Which types of companies are expected to perform well? We are still bullish on the lodging and apartment sectors. Lodging companies continue to post strong quarterly results, as room rates and occupancies are on the rise. We also note, that while supply has picked up, new hotel deliveries are still below historical levels and we expect hotel owners to continue to post solid results throughout the year. The lodging companies in the Zacks' coverage universe are attractively valued compared to other property types, and feel this sector should continue to outperform in 2006. Apartment companies are expensive, as improving industry fundamentals has caused investors to push up shares in Apartment REITs. On a total return basis, Apartment REITs have outperformed all other sectors so far in 2006. Despite the run up, we still think there are some good values in this sector. After several years of weak results, apartment owners have regained pricing power. Rents in many top markets are increasing at a healthy pace, and we expect this to continue through the next few quarters. As interest rates are increasing and the for sale housing market is in a decline, apartment owners will continue to benefit. In the 1st quarter of this year, most apartment companies reported a significant decline in resident turnover due to home purchase. On the flip-side, what area of REITs should investors be most wary of? Retail continues to perform well. Mall and strip center owners are still able to increase rents, as demand from retailers has not diminished. Although, we think consumer spending could be due for a slowdown. Higher energy prices and stagnant to falling home values will inevitably affect spending. This negative effect is usually delayed, and we expect to see reduced consumer spending show up in Retail REITs' results toward the end of 2006 and early 2007. Office fundamentals, while improving, are still weak in many markets. Landlords are still reporting significant rent decreases and concessions on new leases. Although, some markets, such as New York, D.C, and parts of California should perform better as supply demand fundamentals are improving. Many Southern markets, like Dallas and Atlanta, still have high vacancies and cutthroat competition for tenants. We think the office recovery will be uneven and companies with asset concentrations in the south and slower growth Midwest will still have a challenging operating environment. How are speculations on the Fed funds rate having an impact on companies in your coverage? The gradual increase in interest rates should eventually have a negative effect on REITs. Although another 25 bps increase would not change our outlook in general. Historically, higher interest rates have pushed REIT share prices down, as many investors buy REITs for income. Although, the Fed indicated that it might be done raising rates for now, and rates are still very low on a historical basis. The 10-year treasury is now over 5%, while the average yield of equity REITs in the Zacks' coverage universe is just over 4%. Historically, REIT yields have been higher than treasuries. REITs have become less attractive to the income-oriented investor as share prices are still at historical highs. We expect REIT yields to increase in the near term, as better fundamentals should result in dividend increases at better positioned companies. What are your main Buy- and Sell-recommended stocks at this time? We have a Buy on United Dominion (UDR), an apartment REIT with assets concentrated in the Southeast and Southwestern U.S. UDR continues to report strong numbers, and the company is still valued well below more expensive peers. We expect UDR to close the valuation gap with many of its peers in the next twelve months. We also have a Buy on Inkeepers USA Trust (KPA), a small lodging REIT with assets in good markets throughout the country. Inkeepers had a solid 1st quarter, and we expect a strong 2006. The company should grow earnings by about 20% compared to last year. The company is attractively valued on an NAV (net asset value) and price/FFO basis. KPA currently trades slightly under our NAV estimate. Looking toward the end of 2006, where do you see the real estate market positioned? Many REITs have gone private in the past year, and we think this trend will continue throughout the year. Companies that are not being valued appropriately, in managements view, in the public marketplace will opt for higher valuations from institutional buyers. There is still high interest in quality commercial real estate from institutional investors. While the housing market is slowing, commercial real estate values are still at all-time highs. We have not seen pricing come down in most property types. We would expect cap rates to slightly increase as interest rates rise, although there has not been much evidence of this so far. Although, pricing for apartment properties has fallen, as condo conversions has slowed in many once-hot markets. We favor companies that have a history of consistent dividend increases. As REIT share prices are still hovering near all time highs, we think much of the gain from REITs in the next six months will come from dividends and not share appreciation. Look for companies that are producing plenty of free cash flow with low payout ratios, as this is the precursor for dividend increases. Greg Sukenik is a senior analyst covering REITs for Zacks Equity Research. Courtesy: Zacks.com | Blog Home| VitalStocks Home

Click for full article