(STTX) - Steel Technologies, Inc. - Blew away the Street's estimate on Jul 25 and surprised to the upside by 73.1%

Steel Technologies, Inc. (STTX), which is a Zacks #1 Rank stock, topped the Street's earnings estimate in 10 out of the past 12 quarters by an average margin of 24.0%. Consensus estimates have been shooting upward. STTX has a price-to-book ratio of only 1.1, significantly lower when compared to 5.2 for the market. The company is currently yielding 1.4% and has a five-year average dividend yield of 1.3%. Full Analysis Steel Technologies, Inc. is one of the largest independent steel processors in North America. The company processes precision flat-rolled products for various industries such as: automotive, appliance, lawn and garden, agricultural, office equipment and railcar industries. Over the past 12 quarters, STTX exceeded analysts' earnings expectations on 10 occasions, while meeting and missing once. The company's average margin of surprise during this period of time was 24.0%. Earnings per share grew 20.2% over the past five years. For the third quarter of fiscal 2006, analysts were calling for profits of 26 cents per share. STTX blew away the Street's estimate on Jul 25 and surprised to the upside by 73.1% with earnings per share of 45 cents. The result was a penny better than earnings in the prior-year period. The company's tons sold jumped 2%, while toll processing tonnage shipped increased 69% year over year. Chairman and Chief Executive Officer Bradford T. Ray stated that the company's acquisition of automotive steel supplier Kasle Steel “made an immediate and positive contribution to our performance in the third quarter.” He went on to state, “We remain very excited about the impact of and prospects for this acquisition.” The privately-held firm was purchased for $49 million in early May. Consensus estimates have skyrocketed over the past 60 days. Profit forecasts for this quarter and next quarter soared 157.9% and 135.3%, respectively. For the full years of 2006 and 2007, estimates are up 69.1% and 89.5%, respectively, over the same period of time. The Board of Directors declared a semi-annual cash dividend of 15 cents per share on Apr 28. The company has a current dividend yield of 1.4% and a five-year average dividend yield of 1.3%. STTX is currently trading at a valuation of 15.3x current fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 15.5x its current fiscal-year estimated earnings. The company has a price-to-book ratio of only 1.1, significantly lower when compared to 5.2 for the market. 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

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(JNJ) - Over the past 14 quarters, JNJ beat the Street's earnings estimate on 12 occasions while matching estimates on the remaining two

Johnson & Johnson (JNJ) topped analysts' earnings expectations in 12 out of the past 14 quarters. This year marked the 44th straight in which the company boosted its dividend. JNJ has a current dividend yield of 2.4% and a five-year average dividend yield of 1.8%. The company's return on equity crushes that of the industry average—27% compared to a negative 12%. Full Analysis Johnson & Johnson manufactures and sells various products in the health care field primarily in the United States. The company operates through three segments: consumer, pharmaceutical and medical devices and diagnostics. Over the past 14 quarters, JNJ beat the Street's earnings estimate on 12 occasions while matching estimates on the remaining two. Earnings per share grew 16.2% over the past five years. On Jul 18, JNJ bettered analysts' second-quarter earnings expectations by a penny when it posted profits of $2.9 billion, or 98 cents per share. In the prior-year period, the company reported 93 cents. Furthermore, JNJ announced record revenues for the second quarter of $13.4 billion, a 4.7% jump. Broken down by business segment, pharmaceutical sales grew 3.2% to $5.8 billion; medical devices and diagnostics advanced 6.7% to $5.2 billion; and the consumer division climbed 4.5% to $2.4 billion. Chairman and CEO William C. Weldon stated, “Our second-quarter results demonstrated improving performance which is anticipated to continue throughout the remainder of the year. We have made a number of business building investments and have received several significant regulatory product approvals. These investments and approvals will help us both sustain important leadership positions as well as enter new high growth markets characterized by unmet medical need.” JNJ's history of increasing revenues and expanding gross margins is quite impressive, having done so for the past nine years. Moreover, the company has grown profits for seven years running. The Board of Directors announced a 13.6% increase in its quarterly dividend to 37.5 cents per share from 33 cents in late April. This marked the 44th consecutive year in which the company upped its dividend. Investors requiring a stream of cash flow from their investment in JNJ have enjoyed a five-year average dividend yield of 1.8%. The company is currently yielding 2.4%. JNJ's return on equity dwarfs that of the industry average—-27% compared to a negative 12%. JNJ is a Zacks #2 Rank (Buy) stock. Zacks #2 Rank stocks have generated an average annual return of 21.6% since 1988. Because the Zacks Rank has a market cap bias, Growth & Income investors may find a greater number of large-cap stocks by considering both Zacks #1 Rank (Strong Buy) and Zacks #2 Rank (Buy) stocks in their selection criteria. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. 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

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(TDW) - Earnings almost 14% above the estimate - Provides support services to the global offshore energy industry

Tidewater's earnings momentum is strong as evidenced by the fact that it has exceeded analayst estimates for seven consecutive quarters. Year-over-year growth surpassed 100% in six of those quarters. Five analysts have raised their estimates for this fiscal year, while four have done so for next year. Over the past two months, this year's estimates have increased 8.9% to $5.26 per share, while next year's numbers have jumped 10.7% to $5.98 per share. Full Analysis Tidewater, Inc. (TDW), through its subsidiaries, provides offshore supply vessels and marine support services to the global offshore energy industry. As of March 31, 2006, the company operated a fleet of approximately 520 vessels. It provides services supporting various phases of offshore exploration, development, and production, including towing of and anchor handling of mobile drilling rigs and equipment; and transporting supplies and personnel necessary to sustain drilling, workover, and production activities. The company also assists in offshore construction activities and provides various specialized services, including pipe laying, cable laying, and 3-D seismic work. The principal areas of the company's operations include the U.S. Gulf of Mexico, the North Sea, the Persian Gulf, and the Caspian Sea, as well as offshore Australia, Brazil, Egypt, India, Indonesia, Malaysia, Mexico, Trinidad, Venezuela, and west Africa. TDW reported fiscal first-quarter earnings in July that easily surpassed estimates. The company came in with earnings of $1.23 per share, almost 14% above the estimate of $1.08 per share. The company logged $269.8 million in revenue during the quarter, up 40 percent from $192.2 million a year ago. Additionally, TDW announced a stock repurchase program of up to $157.9 million. The company said it plans to use available cash and, when it is to its advantage, borrowings under its revolving credit facility to pay for the buyback. Tidewater's previous repurchase program expired June 30, with the company buying back about 2.4 million shares for $112.1 million, or an average of $46.79 per share. The company also declared a regular quarterly dividend of 15 cents. Earnings momentum is strong at TDW as evidenced by the fact that it has exceeded analayst estimates for seven consecutive quarters. Year-over-year growth surpassed 100% in six of those quarters. Five analysts have raised their estimates for this fiscal year, while four have done so for next year. Over the past two months, this year's estimates have increased 8.9% to $5.26 per share, while next year's numbers have jumped 10.7% to $5.98 per share. The stock is cheap given its robust growth prospects. Currently, TDW is trading at 7.7x next year's estimates, well below the long-term growth rate of 34%, giving the stock an ultra-low PEG ratio of 0.23. 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

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(RBC) - Over the past 60 days, profit forecasts for this quarter have risen 20.9%

Regal Beloit Corporation (RBC), first highlighted as a Growth and Income stock on Feb 28, exceeded analysts' earnings expectations for the past six quarters by an average margin of 6.2%. Consensus estimates have been trending higher for this Zacks #1 Rank stock. RBC has a current dividend yield of 1.3% and recently declared its 185th consecutive dividend. Full Analysis Regal Beloit Corporation is a global manufacturer of commercial and industrial electric motors, electric generators and controls and mechanical motion control products, as well as heating, ventilation and air conditioning (HVAC) motors. RBC's manufacturing and service facilities are located in the United States, Canada, Mexico, Europe and Asia. RBC was first presented as a Growth & Income pick on Feb 28. In the two quarters that have since elapsed, the company topped the Street's earnings estimate by an average margin of 7.2%. Furthermore, consensus estimates have been trending higher. This combination has enabled the company to hang on to the coveted status of a Zacks #1 Rank stock. One would have to go all the way back to the third quarter of 2003 to find a quarter in which RBC failed to meet or exceed analysts' earnings expectations. The company surprised to the upside for the past six quarters. Earnings per share grew 23.2% over the past five years. On Jul 27, the company reported second-quarter profits of 99 cents per share, beating the Street by 5.3% and producing a 59.7% year-over-year improvement. Revenues increased 18.0% to $435.3 million from $368.8 million in the second quarter of 2005. Sales in RBC's electrical segment experienced a 20.5% jump to $382.2 million, boosted by its Sinya motor business acquired during the quarter. Chairman and CEO Henry W. Knueppel stated, “The second quarter was a very active and positive quarter for the company. The sales environment was strong in almost all of our end markets during the quarter and our view remains positive into the future.” Over the past 60 days, profit forecasts for this quarter have risen 20.9% to 81 cents. For the full year of 2006, the consensus estimate increased 6.5% to $3.13 over the same period of time. Five analysts upped their estimates for this quarter while six did so for the full year. The Board of Directors recently declared a quarterly cash dividend of 14 cents per share. The dividend is payable on Oct 16, to shareholders of record as of Sep 29. The company has stuck to its dividend policy, having distributed 185 consecutive dividends. RBC is currently yielding 1.3%. 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

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(ACGL) - Over the past 16 quarters, ACGL topped analysts' earnings expectations in 15 quarters

Arch Capital Group, Ltd. (ACGL), a Zacks #1 Rank stock, exceeded analysts' earnings expectations in 15 out of the past 16 quarters. Earnings per share are forecasted to grow 16% over the next 3-5 years. Consensus estimates for this quarter and for the full year of 2006 have been climbing. ACGL has a price-to-book ratio of only 1.5, considerably lower when compared to 5.2 for the market. The company's PEG ratio is 0.51. Full Analysis Arch Capital Group, Ltd. writes insurance and reinsurance on a worldwide basis through its operations in Bermuda, the United States, Europe and Canada. Over the past 16 quarters, ACGL topped analysts' earnings expectations in 15 quarters, while missing on only one occasion. Earnings per share grew 42.0% over the past five years. For the second quarter of 2006, the company posted profits of $171.0 million, or $2.24 per share. With analysts calling for $1.89 per share, this amounted to an 18.5% positive earnings surprise. In the second quarter of 2005, ACGL reported earnings per share of $1.53. Thus, the company enjoyed a 46.4% year-over-year improvement. Total revenues jumped 7.8% to $859.2 million. Looking ahead, earnings per share are forecasted to grow 16% over the next 3-5 years. This compares quite favorably to the expected growth rate of the industry which currently stands at 12%. The consensus estimate for this quarter soared 25.6% to $1.62 over the past 60 days. For the full year of 2006, profit forecasts jumped 6.8% to $7.58 over the same period of time. Two analysts upped their earnings estimates for this quarter while three followed suit for the full year. ACGL is currently trading at a valuation of 16.6x trailing 12-month earnings and at 8.0x current fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 16.6x trailing 12-month earnings and at 16.0x its current fiscal-year estimated earnings. ACGL has a price-to-book ratio of only 1.5, considerably lower when compared to 5.2 for the market. The company's PEG ratio of 0.51 is also an indication of its discounted valuation. ACGL's return on equity, a common measure of profitability, tops that of the industry average—14% compared to 11%. 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

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(DECK) - Six analysts have raised their numbers for this year, while five have done so for next year

Deckers has an excellent history of significantly beating earnings estimates. DECK has beaten the consensus estimate in 14 out of the past 15 quarters, with eight of them surprising by more than 40%. Six analysts have raised their numbers for this year, while five have done so for next year. Over the past 60 days, this year's estimates have increased 7.5% to $2.45 per share, while next year's numbers have jumped 6.8% to $2.84 per share. DECK is attractively priced at 15x next year's estimates, in-line with the long-term growth rate of 15%. Full Analysis Deckers Outdoor Corporation (DECK) engages in the design, production, and brand management of footwear for men, women, and children in the United States. Its products include slides, sport sandals, thongs, amphibious footwear, trail running shoes, hiking boots, rugged closed-toe footwear, sheepskin boots and slippers, and other casual footwear. The company provides its products under Teva, Simple, and UGC brand names. Deckers Outdoor offers its products through domestic retailers; international distributors; and through its Web sites, catalogs, and retail outlet stores to end-user consumers. The company also operates in China and Macau. DECK's stock got a strong boost after reporting second-quarter earnings that exceeded estimates and lifting its outlook. The company posted earnings of $2.7 million, or 21 cents per share. Sales edged 3 percent higher to $41.7 million from $40.3 million a year ago. Deckers had expected earnings in a range of 3 cents to 5 cents per share and sales of $38 million to $40 million. Analysts forecast profit and revenue at the high end of the company's projections. The company raised its full-year outlook. Deckers now sees sales of $272 million to $278 million, up from a high-end estimate of $276 million. Earnings should range from $2.39 to $2.45 per share, up from a previous best-case estimate of $2.29. Angel Martinez, President and Chief Executive Officer, stated, "We are very pleased that the positive momentum in our business has continued, allowing us to once again exceed expectations. During the quarter we experienced strong full price selling across all three of our brands evidenced by the 600 basis point improvement in our gross margin. We are particularly encouraged by the performance of Teva, as consumer reaction to a limited introduction of new styles as well as improved retail presence, helped drive results. At the same time, our strategic investments in marketing and advertising, research & development, and our retail and international infrastructures have us well positioned to capitalize on the many opportunities that still lie ahead, both domestically and overseas. We are focused on successfully executing our business plan and are dedicated to driving increased profitability and greater shareholder value." The company has an excellent history of significantly beating earnings estimates. DECK has beaten the consensus estimate in 14 out of the past 15 quarters, with eight of them surprising by more than 40%. Six analysts have raised their numbers for this year, while five have done so for next year. Over the past 60 days, this year's estimates have increased 7.5% to $2.45 per share, while next year's numbers have jumped 6.8% to $2.84 per share. DECK is attractively priced at 15x next year's estimates, in-line with the long-term growth rate of 15%. 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

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(SFY) - Independent Oil and Natural Gas Company - When compared to the prior-year period, earnings soared 32.3%

Swift Energy Company (SFY) is a Zacks #1 Rank stock that has met or beat the Street's earnings estimate for 16 consecutive quarters. The company recently reported record profits in the second quarter. Consensus estimates have been on the rise. SFY has a price-to-book ratio of 1.9, compared to 5.2 for the market and its PEG ratio currently stands at 0.98. Full Analysis Swift Energy Company is an independent oil and natural gas company engaged in the development, exploration, acquisition and operation of oil and gas properties primarily in the United States. SFY met or exceeded analysts' earnings expectations for the past 16 quarters. During this time frame, the company topped the Street's estimate on 15 occasions by an average margin of 17.7%. On Aug 3, SFY reported record profits in the second quarter of $38.2 million, or $1.27 per share. When compared to the prior-year period, earnings soared 32.3%. With analysts calling for $1.12 per share, the company surprised to the upside by a solid 13.4%. Revenues ballooned 41.1% to $147.2 million from $104.3 million last year. For the first half of the year, profits and revenues grew 40.9% and 41.7%, respectively, when compared to the first six months of 2005. SFY increased revenues for the past three years, while expanding gross margins and growing profits for the past four. Consensus estimates for this quarter and next jumped 5.1% and 10.2%, respectively, over the past 60 days. Profit forecasts for full years 2006 and 2007 have risen 8.3% and 4.5%, respectively, over the past two months. On Aug 28, SFY announced that it will purchase five onshore Louisiana properties from BP American Production Co. for $175 million. The company estimates that total reserves of the purchased properties are about 58.2 billion cubic feet equivalent of proved reserves and 28.1 billion cubic feet equivalent of probable reserves. The company is currently trading at a valuation of 9.9x trailing 12-month earnings and at 8.8x current fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 16.6x trailing 12-month earnings and at 15.9x its current fiscal-year estimated earnings. SFY has a price-to-book ratio of 1.9, compared to 5.2 for the market and its PEG ratio currently stands at 0.98. The company's return on equity tops that of the industry average—22% compared to 19%. 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

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(JLL) - company beat analysts' second-quarter earnings expectations by 90.2%

Jones Lang LaSalle Incorporated (JLL), which was first highlighted as a Growth and Income stock on Dec 29, has achieved the coveted status of Zacks #1 Rank (strong buy). The company beat analysts' second-quarter earnings expectations by 90.2%. JLL's return on equity crushes that of the industry average--28% compared to 8%. Full Analysis Jones Lang LaSalle Incorporated is engaged in real estate services and money management on a local, regional and global level to owner, occupier and investor clients. The company has more than 100 offices worldwide and operates in more than 430 cities in 50 countries. It has been quite some time since JLL was first highlighted as a Growth and Income stock on Dec 29. More than eight months ago, the stock was a Zacks #2 (buy). Today, due primarily to earnings estimate revisions and positive EPS surprises, JLL has been crowned a Zacks #1 Rank (strong buy). Over the past two quarters, the company exceeded analysts' earnings expectations by an average margin of 118.9%. On Jul 25, JLL reported second-quarter profits of $66.2 million, or $1.94 per share. This resulted in a 90.2% positive earnings surprise and a 162.2% year-over-year improvement when compared to the $24.8 million, or 74 cents. Revenue growth was strong among all of the company's operating segments, soaring 56.8% to $509.8 million. For the first six months of the year, profits came in at $70.8 million, versus $16.2 million in the first half of 2005. Revenues experienced a 49.8% jump and finished at $846.9 million. JLL increased revenues for the past three years while growing profits for six years running. The consensus estimate for this year currently sits at $4.26. This represents a 9.0% increase when compared to the consensus of 60 days ago. Profit forecasts for 2007 have risen 4.9% to $4.49 over the same period of time. Earnings per share are forecasted to grow 15% over the next 3-5 years, which is in line with the projected industry growth rate. On Apr 19, the Board of Directors declared a semi-annual cash dividend of 25 cents per share of common stock. The company has a current dividend yield of 0.60%. Management has been very successful in generating a profit with shareholder money. The company's return on equity is more than three times greater than that of the industry average—28% compared to 8%. 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

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(ISE) - Revenue increased 38.2 percent year-over-year

International Securities Exchange has only been public for six quarters, but it has met or exceeded earnings estimates in five of them. Five analysts have raised their estimates for both this year and next. Over the past two months, this year's estimates have increased eight cents to $1.32 per share, while next year's numbers jumped 11 cents to $1.57 per share. The stock is trading at 27.3x next year's estimate, above the projected long-term growth rate of 19.59%, giving the stock a PEG ratio of 1.39. Full Analysis International Securities Exchange, Inc. (ISE) operates as an electronic exchange for equity options and related services in the United States. It provides a trading platform in listed equity and index options; and related services that are designed to improve the market for equity options. The company lists options on the common stock, other equity securities of publicly traded companies, and on indexes comprised of such equity securities. It also develops products, such as options trading based on proprietary sector indexes and market-data related offerings based on data generated by market activity on its exchange. ISE reported a strong second-quarter in late-July coming in with 35 cents per share, 9% ahead of the consensus estimate of 32 cents. Revenue increased 38.2 percent to $51.1 million from $37 million in the year-ago period. Equity option volume averaged a record 2.4 million contracts per day, up by almost half since the year-ago period. Charges for those transactions drove fee revenue to $40.7 million from $27 million a year earlier. Third-quarter earnings will be released on October 26. "We have been successful in growing our institutional business and the volume that we derived from our institutional functionalities accounted for approximately 21 percent of our total average daily trading volume for the quarter," said President and Chief Executive David Krell. The company went public in March 2005 and projects it will continue to expand its business in future quarters as it enters the equities market. ISE said it plans to open the ISE Stock Exchange to better compete with other exchanges. ISE has only been public for six quarters, but it has met or exceeded earnings estimates in five of them. Five analysts have raised their estimates for both this year and next. Over the past two months, this year's estimates have increased eight cents to $1.32 per share, while next year's numbers jumped 11 cents to $1.57 per share. The stock is trading at 27.3x next year's estimate, above the projected long-term growth rate of 19.59%, giving the stock a PEG ratio of 1.39. 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

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(FITB) - (CLE) - (C) - Investment Quality Trends newsletter - Sampling of the "Timely Ten"

Kelley Wright, editor of the Investment Quality Trends newsletter, says the fact that there will be a next up cycle is a fore gone conclusion. Find out what this featured expert has to say about the housing market and the yield curve. Afterward, take a look at some of the stocks that were plucked from Wright's Timely Ten list. Commentary from September 1 Much has been written about the decline in the housing market and the inversion of the yield curve. Most conclusions are that the combination of the two guarantees a recession. The much publicized statistics for housing do paint a gloomy picture. That there is a correction underway in housing should come as no surprise, however. No market can go straight up for an extended period of time without corrective consequences. Many economists are fretting about where the growth in GDP will come from now that housing is correcting. The answers remain to be learned, but, Kelley Wright will note that the discussion about the future source of GDP growth takes place in each economic transition. In the end, the resiliency of the American economy is truly amazing; somehow we always find our way through. As for the yield curve, the current environment can continue for quite some time without adverse consequences. What would be a cause for concern is if short-term rates begin to decline quickly in relation to long term rates. Declining short term interest rates generally indicate the need for economic stimulation. If Wall Street really begins to believe there is potential for a recession, Wright and his team's Undervalued category will swell with new buying opportunities. These opportunities will eventually provide the foundation for profits in the next up cycle. That there will be a next up cycle is a fore gone conclusion. Economies and markets always ebb and flow, thus cycles always repeat. Wright and his team stand ready. A Sampling of the Timely Ten Fifth Third Bank (FITB) is a registered financial holding company and a multi-bank holding company. They engage primarily in commercial, retail and trust banking, data processing services, investment advisory services and leasing activities. In addition, the company provides credit life, accident, health and mortgage insurance, discount brokerage services and property management for its properties. Claire's Stores (CLE), through its wholly-owned subsidiaries, is a leading mall-based retailer of popular-priced fashion accessories and apparel for pre-teens and teenagers. The Company's operations are divided into three principal product categories: Jewelry, Accessories, and Apparel. Jewelry consists of costume jewelry, including earrings and ear piercing services, while Accessories consists of other fashion accessories, hair ornaments, totebags and novelty items. Apparel includes name-brand as well as private label shirts and pants. Citigroup Inc. (C), the preeminent global financial services company with some 200 million customer accounts in more than 100 countries, provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage, and asset management. Content Courtesy: Zacks Investment Research | Blog Home| VitalStocks Home

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(CRYP) - (HURC) - (PWEI) - (UNT) - Upside newsletter - some truly cheap stocks

Richard Moroney, editor of the Upside newsletter, put together a list of nine companies that represent attractive picks for investors looking to add some truly cheap stocks to their portfolios. Read this featured expert's updates on a couple of these standout values, a developer and supplier of online casino and poker software as well as a maker of computer-controlled machines for the metalworking industry. Commentary A large body of academic research suggests value-related metrics work well with small and midcap stocks, and value metrics feature prominently among the most effective variables in Richard Moroney and his team's Quadrix® rating system. The Quadrix Value score — reflecting a weighted average of such ratios as price/earnings and price/cash flow, along with those ratios relative to historical norms — has been highly effective in real-time use since 2000 and in back-tests to 1980. Historically, stocks cheap based on several valuation measures have provided especially good returns. The stocks listed below are cheap based on seven of the most effective Quadrix variables and earn Value scores above 91, placing them among the cheapest 9% of the roughly 5,000 U.S.-traded stocks in Moroney and his team's Quadrix universe. Stocks are usually cheap for a reason, and the ones listed below face likely slowdowns in profit growth over the next year. Most battle in highly cyclical markets against larger rivals, and several face major company- specific risks. Owning just one or two of these stocks is a fairly risky proposition, which is perhaps one reason such stocks have compensated shareholders with above-average returns over the long haul. Still, history suggests that holding a diversified basket of small and midcap value stocks is a winning strategy, and the 38 stocks on Moroney and his team's Buy List include 19 with Quadrix Value scores above 80. The stocks listed below represent attractive picks for investors looking to add some truly cheap stocks to their portfolios. At the end of June, Canada-based CryptoLogic (CRYP), a developer and supplier of online casino and poker software, had no debt and cash of $127 million, or more than $9 per share. Cash flow and free cash flow have trended higher in recent quarters, reflecting outstanding operating results. Per share earnings jumped 72% on a 43% sales gain in the first half of 2006, and strong growth should continue in the second half. Hurco (HURC), a maker of computer-controlled machines for the metalworking industry, trades at a modest valuation despite outstanding operating momentum. Helped by strong sales of high-priced models, particularly overseas, revenue jumped 24% in the July quarter. Pretax income surged 70%, though net income was up 32% because of a higher tax rate. The stock has been pressured by concerns about a possible industry slowdown. But new orders jumped 32% in the July quarter, with strong demand in Europe and Asia. U.S. orders were up only slightly in the July quarter. Hurco is stepping up production at its Taiwan facility to meet rising Chinese demand. It also recently opened a new technical center in Shenzhen, China. Additional samples of the 9 standout values include: PW Eagle (PWEI) is a leading extruder of PVC pipe and polyethylene tubing products. The Company operates eight manufacturing facilities in the midwestern and western United States. Trico Marine Services (TRMA) provides a broad range of marine support services to the oil and gas industry, primarily in the North Sea, Gulf of Mexico, West Africa, Mexico and Brazil. The services provided by the Company's diversified fleet of vessels include the marine transportation of drilling materials, supplies and crews, and support for the construction, installation, maintenance and removal of offshore facilities. Unit (UNT) is engaged in the land contract drilling of oil and natural gas wells, the development, acquisition and production of oil and natural gas properties, and the marketing of natural gas. Its principal areas of operations are located in the Anadarko and Arkoma Basins, which cover portions of Oklahoma, Texas, Kansas and Arkansas and has additional producing properties located in other states, including but not limited to, New Mexico, Louisiana, North Dakota, Colorado, Wyoming, Montana, Alabama and Mississippi. Content Courtesy: Zacks Investment Research | Blog Home| VitalStocks Home

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(BMHC) - (CTX) - Another Look at Housing - Consensus Home Builder Review

Gregory Spear, editor of The Spear Report newsletter, explains that interest rates and corporate profits are just two legs supporting the four-legged economic table. The balance of the U.S. economy relies upon the consumer and that segment, in turn, depends directly on the state of the housing sector. Check out this expert's analysis and his review of two home builders. Afterward, discover some names from the Consensus Buy List. Detail from September 1 The market has been known to climb a Wall of Worry, but one thing that it can't ignore forever is the Federal Reserve. The market has been rallying in the last week due to the increasing likelihood that the Fed has stopped raising rates. It would be unusual for the Fed to stop a tightening cycle at 5.25%, but that now appears to be a high probability scenario. The fed funds futures are pricing in just a 10% chance of a rate increase at the September FOMC meeting and it is a coin flip by the end of the year. This past Tuesday (8/29), the release of the FOMC minutes of the August meeting only served to reinforce this dovish prognosis. The Fed is forecasting a declining economy for the next six quarters. To understand why the market is rallying on that dismal prognosis, we need to take a look at how U.S corporations have interfaced with the Fed during the recent recovery. The fact that the Fed raised rates 17 times in modest quarter-point increments since June 2004 was not a problem for Wall Street, because rates were rising from historically depressed levels. When the Fed decided to reverse course 26 months ago and start raising rates, the prime rate stood at 4%, and the federal funds rate was 1%, both 46-year lows. What had precipitated such dramatic monetary measures? The Fed faced four daunting dragons during 2000-2003: a collapsing equity bubble, a catastrophic terrorism event, major corporate corruption scandals and a war in the Middle East, the unrelenting sequence of which threatened to undermine confidence in the “system.” Drastic times required drastic measures. Once the dust had settled, the series of rate increases was medicine the market expected to take. The strength of the subsequent economic recovery, however, has been on the weak side. Gregory Spear and his team attribute that principally to gun-shy corporate CFOs who have kept the capital spending wallet on the hip, as well as rising energy and commodity costs. Instead of spending, corporations used the low interest rates to strengthen balance sheets by refinancing long-term debt, they streamlined U.S. operations and deployed capital overseas to compete in an ever more globalized market environment. This proved to be a wise move, as corporate profits have remained robust despite spotty GDP growth, cutting the P/E ratio of the S&P 500 in half over the last four years. Impressive. Management's proven ability to maintain profitability in challenging conditions is a prime reason the stock market is not shaking in its boots about the well-telegraphed economic slowdown that lies ahead. That said, interest rates and corporate profits are just two legs supporting the four-legged economic table. The balance of the U.S. economy relies upon the consumer and that segment, in turn, depends directly on the state of the housing sector. In raising rates, the Fed's goal has been to slow the economy enough to prevent an inflationary spiral without triggering a recession. If the Fed is now about to reverse course and start easing in 2007, this time it is only facing one dragon…housing, but it may turn out to be the biggest dragon of them all. Insulating Factors The good news is that although sales have declined dramatically in some areas, prices are still more or less flat year over year, not adjusted for inflation. In addition, mortgage rates have declined for the last five weeks in a row and 6% mortgages are not historically high. The pace of mortgage refinancing has actually risen in five of the past six weeks, with refi activity at its highest level since January. Curiously, the amount of cash being extracted from property has remained relatively constant in spite of higher interest rates and a softening housing market. This may mean that homeowners still have significant equity in their property to cushion the deflationary blow. Low rates of unemployment should also help. This past week, estimates for personal consumption in Q2 were revised higher, which corresponds with the fact that wages and salaries grew at an 8.5% annual pace, the highest in more than six years. Recent reports from the nation's retailers are consistent with data from the Commerce Department that personal consumption increased 0.8% in July, the largest increase in spending since January and twice the June rate. It is worth remembering that the Consensus homebuilders, which have been declining for a year, have been reporting decent quarterly profits (see discussion below). In addition, although insiders like Robert Toll are expressing shock and dismay at the magnitude of the decline in demand, the homebuilding stocks themselves are not going down on the bad news. Moreover, there were only two sales by homebuilder insiders reported to the SEC over the summer: $3.6 million by Ryland's CEO Chad Dreier, and $1 million by Lennar's vice president David McCain, both part of regular programs set up years ago. The Toll brothers themselves (Robert and Bruce) exercised options recently, but did not cash them out. In contrast, insider selling among builder executives skyrocketed a year ago, with the same two brothers liquidating $265 million worth of shares in just one month that summer. The present insider situation in the builders further differentiates the industry from the dot com debacle, when insider selling was aggressive even after stocks had fallen 50%-60%. Currently, the stock of most builders is selling for around book value. If they start to write down significant amounts of land inventory over the next year, however, book value may decline another 20% or so, and Spear's team would expect shares to follow suit. But wouldn't it be a curious paradox if in the midst of a 2007-2008 “housing crisis,” the best long-term investments turn out to be the homebuilders themselves? Consensus Home Builder Review Spear takes a look at sales and earnings numbers reported by some Consensus home builders over the past quarter, starting with the two on the Buy List. Building Materials (BMHC) is the smallest construction-related company on the Buy List. The provider of construction services and building materials to professional residential builders and contractors reported second quarter results on July 25th. Revenue increased 31% to $922 million, while net income was flat year over year, at $34 million or $1.16 per share. The company's survival strategy: diversify regionally via acquisitions to avoid being concentrated in weak markets. With over 20% of the float sold short, many are betting against this company. If they are wrong, they will need to buy shares to cover their shorts. Centex (CTX) reported earnings on July 24th. Home closings increased 1% and revenues were up 13%, but earnings per share declined 11% to $1.39 and unit backlog declined 17% as sales orders fell 21%. Centex's full year 2007 earnings guidance is $7.00 per fully diluted share. The company's survival strategy: improve the balance sheet, stop acquiring land, diversify geographically and look for acquisitions in rebounding regions. In the first fiscal quarter, Centex repurchased 3,500,000 shares, and in July the company repurchased another 1,000,000 shares. There are 10,000,000 shares remaining in the current repurchase authorization. Other Consensus Buy List stocks include: Whirlpool Corp. (WHR) manufactures and markets a full line of major appliances and related products, primarily for home use. The company's principal products are home laundry appliances, home refrigerators and freezers, home cooking appliances, home dishwashers, room air-conditioning equipment, and mixers and other small household appliances. The company also produces hermetic compressors and plastic components, primarily for the home appliance and electronics industries. Labor Ready Inc. (LRW) is a national provider of temporary workers for manual labor jobs. Their customers are primarily businesses in the freight handling, warehousing, landscaping, construction and light manufacturing industries. These businesses require workers for lifting, hauling, cleaning, assembling, digging, painting and other types of manual or unskilled work. Content Courtesy: Zacks Investment Research | Blog Home| VitalStocks Home

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