ABG - Asbury Automotive Group, Inc - Consensus estimates for this quarter and next are up

Asbury Automotive Group, Inc. (ABG), a Zacks #1 Rank stock, exceeded analysts’ earnings expectations in six out of the past seven quarters by an average margin of 8.6%. Consensus estimates have been on the rise over the past two months. The Board of Directors has returned value to shareholders through both stock buybacks and dividend payments. ABG is currently yielding 2.8%. The company has a price-to-book ratio of only 1.6, compared to 4.3 for the market. Full Analysis Asbury Automotive Group, Inc. operates as an automotive retailer in the United States. The company offers various automotive products and services, including new and used vehicles and related financing, vehicle maintenance and repair services, replacement parts, and warranty, insurance, and extended service contracts. ABG topped analysts’ earnings expectations in six out of the past seven quarters by an average margin of 8.6%. The company is scheduled to report its first-quarter 2007 results on Apr 26. On Feb 15, ABG posted fourth-quarter earnings per share of 41 cents, beating the Street’s estimate of 38 cents by 7.9%. Compared to profits of 37 cents per share in the prior-year period, the result equated to a 10.8% year-over-year improvement. Revenues amounted to $1.38 billion, compared to $1.32 billion in the fourth quarter of 2005. Same-store sales, or sales at stores open at least a year, jumped 5%. For the entire year, profits came in at $60.7 million, versus $61.1 million last year. Revenues climbed to $5.75 million from $5.41 million in 2005. ABG increased revenues and expanded gross margins for the past four years. Consensus estimates for this quarter and next are up one and two cents, respectively, over the past 60 days. Profit forecasts for this year and next have risen eight cents and four cents, respectively, over the same period of time. Earnings per share are projected to grow 12% over the next 3-5 years, in line with the expected growth rate of the industry. In mid-February, the Board of Directors approved the repurchase of 1.3 million shares of its common stock. Moreover, management has returned value to shareholders in the form of dividend payments. On Jan 18, the Board declared a quarterly cash dividend of 20 cents per share of common stock. The company has a very respectable current dividend yield of 2.8%. ABG is currently trading at a valuation of 13.6x current fiscal-year estimated earnings and at 12.3x next fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 15.6x current fiscal-year estimated earnings and at 14.5x next fiscal-year estimated earnings. The company has a price-to-book ratio of only 1.6, compared to 4.3 for the market. 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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MON - Monsanto Co - $1.5 billion partnership with BASF, the world's largest chemical company

Monsanto Company (MON), a stock that we first featured on Jan 17, continues to shine. The company exceeded analysts’ earnings expectations in seven out of the past eight quarters by an average margin of 12.7%. After posting solid results for the second quarter and first half of fiscal 2007, MON raised its full-year profit guidance to between $1.60 and $1.65 per share. The company has a current dividend yield of 0.89%. Full Analysis Monsanto Company, together with its subsidiaries, provides agricultural products for farmers in the United States and internationally. The company operates in two segments, Seeds and Genomics, and Agricultural Productivity. On Apr 4, MON posted second-quarter fiscal 2007 profits of 98 cents per share. The result beat the Street’s estimate by three cents and marked a 22.5% year-over-year improvement for the company. MON has now exceeded analysts’ earnings expectations in seven out of the past eight quarters by an average margin of 12.7%. Revenues jumped 19.1% to $2.62 billion, from $2.2 billion a year ago. Higher revenues were fueled by stronger sales of seeds in the U.S. and herbicides in Brazil, Europe, Africa and Argentina. For the first half of fiscal 2007, profits came in at $633 million, compared to $499 million for the first half of last year. Revenues experienced a 15.2% leap to $4.16 billion from $3.61 billion. Chairman, President and CEO Hugh Grant stated, "While the 2007 agriculture season is shaping up to be an outstanding one, the strong demand that we've seen for our higher-yielding corn seeds and our higher-margin, triple-trait corn technology has translated into an excellent second quarter and first half for our business." Due to strong demand for corn products, MON upped its full-year profit guidance. The company now expects earnings per share between $1.60 and $1.65, versus its prior outlook, which called for profits between $1.50 and $1.57 per share. On Mar 21, MON announced a $1.5 billion partnership with BASF (BF), the world's largest chemical company based in Ludwigshafen, Germany, in which the two companies will develop more genetically modified crops to meet the growing demand for vegetable-based fuels. MON stated that the partnership would begin immediately, although the company wouldn't say how long it will last. On Jan 17, the Board of Directors declared a quarterly cash dividend of 12.5 cents per common share of stock. The dividend is payable on Apr 27 to shareowners of record as of Apr 6. MON is currently yielding 0.89%. MON 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. 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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OMCL - Omnicell, Inc - rise in information technology (IT) investment by healthcare providers

OMCL has posted double-digit earnings surprises in five consecutive quarters. Investors rewarded the stock with big price gains in four out of those five periods. Four analysts have raised their estimates for this year. Over the past 90 days, this year's estimates have jumped nine cents to 57 cents per share. The company is sporting a 15 ROE, well above the industry's average of 6%. Full Analysis Omnicell, Inc. (OMCL) develops and markets end-to-end automation solutions for the medication-use process. These automation solutions contain medication and supply dispensing systems, central pharmacy storage, retrieval and packaging solutions, a bedside automation solution, a physician order management solution, a decision support application, and a Web-based procurement application. The company provides procurement and inventory management systems to more than 1,600 healthcare providers: hospitals, integrated delivery networks, and specialty healthcare facilities, including nursing homes, outpatient surgery centers, catheterization labs and clinics. The company s major product offerings include Omnicell PharmacyCentral, SafetyPak, SafetyMed, OmniLinkRx, DecisionCenter and OmniBuyer. Through its Omnicell PharmacyCentral and SafetyPak products, OMCL offers automation to the central pharmacy and improves the storage and retrieval of medications. The rise in information technology (IT) investment by healthcare providers, coupled with a gradual modernization of the healthcare system, has created a demand for automated healthcare management systems. Moreover, due to the nature of the untapped markets in which OMCL operates, the company has a tremendous growth opportunity from these markets in the coming years. The $10 billion automated systems market, which the company caters to through its Omnicell PharmacyCentral and SafetyPak products, is only one-third penetrated. An increasing number of institutions are planning to switch over to the automated mode by procuring medication and supply solutions to address the shortage of nursing facilities in America. This further provides an opportunity for the company to boost its top-line growth. In the $1.7 billion pharmacy retrieval segment, which includes dispensing and medication storage and packaging solutions, the average penetration per customer is less than 5%. The company is showing the ability to compete against larger players, winning a piece of the Novation three-year contract to supply healthcare automation technology to its 2,500 members. Omnicell was one of five companies to be awarded a contract, out of 27 companies who submitted the bids. The contract includes the full line of Omnicell's medication-use process and supply chain management products. OMCL has posted double-digit earnings surprises in five consecutive quarters. Investors rewarded the stock with big price gains in four out of those five periods. Four analysts have raised their estimates for this year. Over the past 90 days, this year's estimates have jumped nine cents to 57 cents per share. The company is sporting a 15 ROE, well above the industry's average of 6%. 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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HUM - Humana Inc - ROE of 16.8%, three percentage points above the industry average

Humana Inc. (HUM) recently surpassed fourth-quarter expectations by 4.6% on earnings that more than doubled from the previous period. Despite faster growth, the stock trades at a discount to both the market and the industry. While possible Medicare Advantage cuts warrant attention, concern may be overblown. Full Analysis Humana, Inc. provides health insurance coverage and related services through various traditional and consumer-choice plans for employer groups, government-sponsored programs, and individuals in the United States. It operates in two segments, Government and Commercial. The Government segment consists of members enrolled in government-sponsored programs. The Commercial segment consists of members enrolled in products marketed to employer groups and individuals. The company was founded in 1964 and is headquartered in Louisville, Kentucky. On Feb 5, the Zacks #1 Rank Stock reported fourth-quarter EPS of 92 cents, more than double the year-ago period and four cents above expectations. Driving the surprise was a 54% increase in revenue to $5.65 billion from $3.66 billion a year ago. For the full year, net income rose by 64% to $487.4 million, while revenues rose by 48.5% to $21.4 billion. As a result of the strong growth, Humana raised its 2007 profit projections to between $4 and $4.20, up from previous estimates of $3.90 to $4.10. According to Chief Executive Michael B. McCallister, “Even at the low end, this projection means that by Dec 31, 2007, Humana will have nearly doubled in size in two years and more than doubled its net income.” With an ROE of 16.8%, three percentage points above the industry average, and growth rates above the market and industry, Humana seems poised for outperformance. As testament to the company’s strong fundamentals, Zacks currently ranks Humana number one out of 14 companies in the Medical Care Industry, which enjoys an industry rank of 18 out of 217 categories. Concern of late has centered on Congressional scrutiny of the Medicare Advantage Program, the privately-run component of the government health plan for seniors, which comprises almost half of Humana’s earnings. Cutting payments to private companies that run Medicare plans could have a drastic effect on the company’s income statement. However, an analyst recently attached an “Outperform” rating on the stock, saying threats of the program’s demise are exaggerated. HUM is currently trading at 14.3x current fiscal-year estimated earnings, a discount to the S&P 500 multiple of 15.6x and respective industry multiple of 15.1x. In addition, the company trades at 12.3x next fiscal-year earnings, below the respective market multiple of 14.4x. Furthermore, Humana has a Price to Book Ratio of 3.1, below the S&P 500 Price to Book of 4.3. 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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NOV - National Oilwell Varco Inc - PEG ratio is 0.5

National Oilwell Varco Inc. (NOV) continues to benefit from solid fundamentals, rising oil prices and a solid backlog of new orders. Despite a year-to-date return of 27.8%, the stock continues to trade at a discount to the market and in-line with the industry average. Full Analysis With oil prices around $65 per barrel, geopolitical concerns heating up and the summer driving season rapidly approaching, some attention to the sector seems warranted. National Oilwell Varco Inc. engages in the design, construction, manufacture, and sale of systems, components, and products to the oil and gas industry worldwide. It operates in three segments: Rig Technology, Petroleum Services & Supplies, and Distribution Services. The company's machinery and equipment include drawworks, mud pumps and power swivels, which are the major mechanical components of rigs used to drill oil and gas wells. On Feb 6, the Zacks #1 Rank Stock announced fourth-quarter profits of $239.2 million, or $1.35 per share, up 114.3% from the respective prior period and 30 cents above expectations. Revenues soared 50.7% to $2.08 billion from $1.38 billion a year earlier. The company attributed its impressive quarterly results to strong demand for its rig technology products and oil field supplies. For the entire year, profits jumped to $684 million, compared to $286.9 million in 2005. Revenues ballooned to $7.03 billion from $4.64 billion. NOV increased revenues, expanded gross margins and grew profits for the past three years. The outlook for 2007 appears positive as the company maintains a solid backlog of equipment and technology orders. According to CEO Pete Miller, “We expect 2007 to be another successful year for our company as we continue to help our customers retool the world's rig fleet after years of underinvestment, and bring better, faster, safer and more environmentally sound technologies to the energy industry.” Since Zacks first featured NOV as a Value play on Feb 14, 2007, the stock has returned 15%. Year-to-date the stock is up 27.8%, handily beating the so-far lackluster S&P 500. While valuations have increased since NOV was last featured, the stock remains compelling, trading at multiples below the market and in-line with the industry average. The stock is currently trading at a valuation of 14.1x current fiscal-year estimated earnings and at 12.2x next fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 15.5x current fiscal-year estimated earnings and at 14.3x next fiscal-year estimated earnings. NOV has a price-to-book ratio of 2.7, compared to 4.3 for the market. Its PEG ratio is 0.5. 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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TNE - Tele Norte Leste Participações - cash flow has improved - dividends increasing

Investors should be attracted to the company for its growth prospects as well as its healthy dividend payout. The company has completed its major capital expenditures, which should leave it in better shape to pay down debt and increase its dividends. Furthermore, the strong Brazilian economic environment will continue to help the company. Full Analysis Tele Norte Leste Participações (TNE), also known as Telemar, is a leading provider of fixed and wireless telecommunications services in Brazil. The company operates two business segments: wireline/ broadband communications, and wireless services. The company has a diverse mix of revenues. Through its subsidiary, Telemar S.A., the company is the largest provider of wireline services in South America, with around 14.3 million access lines in service. Telemar also provides local, intra/inter-regional, international long distance services, and custom data transmission services in a territory encompassing approximately 64% of the population of Brazil. The company has established quite some time ago a strong presence in the fast-growing Brazilian wireless sector. The success of Telemar's wireless service has been impressive. The mobile subscriber base increased 76.3% during 2004, 50.7% in 2005, 8.5% in the first quarter of 2006, 7.3% in the second quarter, 5.1% in the third quarter 2006, and 3.4%in the fourth quarter 2006. At the end of the December 2006, Oi had 13.08 million total subscribers and an estimated market share of 27.4% in its business area. Oi is still one of the fastest growing wireless operators in Brazil. Additionally, the current outlook for the Brazilian economy remains promising. The Brazilian Central Bank should continue to ease the domestic monetary policy. Indeed, there is room for continued interest rate cuts throughout 2007, since the Brazilian domestic interest rates remain among the highest in the world at 12.75% against a 2006 inflation rate of just 3.2% and an expected inflation for 2007 of 3.9%. Having completed its major capital expenditures, TNE's cash flow has improved, which has enabled the company to increase its dividends payouts to around 60% of its net income. Currently, its dividend yield is 5.2%, and could reach the 6.0% to 7.0% range during 2007. Investors should be attracted to the company for its growth prospects as well as its healthy dividend payout. The company has completed its major capital expenditures, which should leave it in better shape to pay down debt and increase its dividends. Furthermore, the strong Brazilian economic environment will continue to help the company. 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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MCHP - Microchip Technology - met or exceeded earnings estimates in each of the past eight quarters

The company has met or exceeded earnings estimates in each of the past eight quarters. Year-over-year earnings growth has consistently exceeded 20% over this time period. The company pays a 3% dividend yield, which is rare for a technology stock. The stock is reasonably valued at 23.8x next year's estimates. Full Analysis Microchip Technology (MCHP) designs and markets microcontrollers. Microcontrollers are microprocessors on a single integrated chip that is intended to operate as an embedded system. In addition to a central processing unit (CPU), a microcontroller typically includes small amounts of random access memory (RAM), non-volatile memory, timers, and I/O ports. The company's manufacturing expertise allows it to offer products that have low power consumption, small footprint, high performance, and ease of use. By owning its own wafer fabrication facilities as well as most of its assembly and test operations, the company can have control over its design and production cycles. Thus achieving cost improvements by manufacturing prowess is an important part of the company's strategy. Microchip ss well positioned in its core microcontroller market for several reasons. First, the company continues to be a leading player in the 8-bit microcontroller space. Design activity for 8-bit flash microcontrollers continues to be strong. Moreover, the company is targeting the high performance 16-bit microcontroller market and demand is reflecting strong momentum. In the December quarter, Microcontroller revenue rose 7.4% year over year. Flash microcontroller revenue increased 24% year over year. Flash microcontrollers represented over 65% of the microcontroller business. Microchip shipped 21,444 development tools last quarter, indicating strong design win activity. During 2006 Microchip added several new regional distributors and catalog houses in Europe. Also, the company has been pursuing a strategy of creating demand by expanding its technical, sales and application engineering resources. On January 31, Microchip announced an increased quarterly cash dividend of 26.5 cents a share on its common stock, payable on February 28, to stockholders of record as on February 14. The company has met or exceeded earnings estimates in each of the past eight quarters. Year-over-year earnings growth has consistently exceeded 20% over this time period. The company pays a 3% dividend yield, which is rare for a technology stock. The stock is reasonably valued at 23.8x next year's estimates. 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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VMI - Valmont Industries, Inc - fourth-quarter profit jumped nearly 39% on revenue gains

The company only has one analyst following the stock, but he raised his 2007 estimate from $2.78 to $2.96 per share on February 16. Similarly, next year's estimates have risen 35 cents to $3.40 per share over the past 60 days. The stock is attractively valued at 17.4x next year's estimate. Full Analysis Valmont Industries, Inc. (VMI) and its subsidiaries produce fabricated metal products; metal and concrete pole, and tower structures; and mechanized irrigation systems worldwide. The company operates through five segments: Engineered Support Structures, Utility Support Structures, Coatings, Irrigation, and Tubing. The company's customers primarily include state and federal governments, contractors, utility and telecommunications companies, manufacturers of commercial lighting fixtures, and farms, as well as companies from general manufacturing sector. VMI said its fourth-quarter profit jumped nearly 39% on revenue gains, with especially strong demand for wireless communication structures in China. Quarterly profit totaled $16.1 million, or 62 cents per share, compared with $11.6 million, or 45 cents per share, in the year-ago period. Sales rose to $328 million from $311.3 million in the same period of 2005. Analysts expected 59 cents per share. "We had a strong finish to the year with operating income as a percent of sales increasing nearly one percentage point for the quarter and net earnings up 39%," said Mogens C. Bay, Valmont's Chairman and Chief Executive Officer. "Our international businesses continued to improve and contributed substantially to sales and earnings." "Sales in the Engineered Support Structures Segment were bolstered by demand for wireless communication structures in China. Sales in the North American and European markets were basically unchanged." The company only has one analyst following the stock, but he raised his 2007 estimate from $2.78 to $2.96 per share on February 16. Similarly, next year's estimates have risen 35 cents to $3.40 per share over the past 60 days. The stock is attractively valued at 17.4x next year's estimate. 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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PNSN - Penson Worldwide, Inc - a recent IPO - earnings results are quite encouraging

PNSN is a recent IPO and doesn't have much of an earnings history, but the early results are quite encouraging. This is an under-followed growth story that could generate buzz when it catches onto the mainstream investing public. Over the past month, this year's earnings estimates have increased three cents to $1.47 per share. The stock is attractively valued at 16.8x next year's estimates. Full Analysis Penson Worldwide, Inc. (PNSN) provides a range of securities-processing infrastructure products and services to the securities and investment industry primarily in the United States, Canada, and Europe. It offers securities and futures clearing; margin lending; facilities management; technology and data products, which include customizable front-end trading platforms; investment manager/advisor services; and other-related services to broker-dealers, hedge funds, banks, and financial technology firms. The company also supports trading in multiple markets, investment products, and currencies. In addition, it offers customized software solutions to enable its correspondents and their customers to review their account portfolio information through the Internet. In late-February, the company said its fourth-quarter profit climbed nearly threefold, thanks to increased sales and improved gross margins. Net income for the quarter was $7.7 million, or 30 cents per share, up from $2.6 million, or 14 cents per share, for the fourth quarter 2005. Revenue for the quarter was $79.4 million, up 37% from $57.9 million in the year ago period. Operating margin for the quarter was 14.8 percent, up from 7.3% in the year ago period. Net income for the full year was $24.5 million, or $1.06 per share, up from $2.9 million, or 17 cents per share for 2005. Revenue for the year was $287.6 million, up 65 percent from $174.6 million in the prior year. "We are very pleased with both our quarterly and annual results, which reflect the strong fundamentals of our business," said Philip A. Pendergraft, Chief Executive Officer. "We are seeing growth in balances, in our correspondent base in both numbers and in quality, and a broadening service offering. Our US and Canadian clearing businesses continue to lead the way, but we have seen good progress in our UK clearing business and at Nexa Technologies as well. With the completion of our Schonfeld and Goldenberg, Hehmeyer clearing acquisitions, we believe that we are well positioned to continue the progress that we have achieved in 2006 in all business areas." PNSN is a recent IPO and doesn't have much of an earnings history, but the early results are quite encouraging. This is an under-followed growth story that could generate buzz when it catches onto the mainstream investing public. Over the past month, this year's earnings estimates have increased three cents to $1.47 per share. The stock is attractively valued at 16.8x next year's estimates. 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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