Zacks.com announces the latest list of top performing Zacks #1 Rank (“strong buy”) stocks. The stocks on the prestigious list with the highest returns last week were Vimpel-Communications (NYSE: VIP), Buckeye Technologies Inc. (NYSE: BKI), L.B. Foster Company (NASDAQ: FSTR), CF Industries Holdings, Inc. (NYSE: CF) and Monsanto Company (NYSE: MON). Each of these stocks easily outperformed the S&P 500.
Stocks ranked #1 (Strong Buy) by Zacks have produced an average annual return of +32% since inception in 1988. During the 2000-2002 bear market, Zacks #1 Rank stocks gained 43.8% while the S&P 500 tumbled 37.6%. To learn more about the Zacks Rank, go to http://at.zacks.com/?id=3172.
Here is a synopsis of the last week’s best performing Zacks #1 Rank stocks.
Vimpel-Communications (NYSE: VIP) announced last week that it will acquire 100% of the outstanding shares of Golden Telecom, Inc. for approximately $4.3 billion. Golden Telecom is a leading facilities-based provider of integrated telecommunications and Internet services. Among other impacts, Vimpel expects the transaction to transform it from a mobile-centric operator to an integrated service provider with an established position in high-growth broadband, data and mobile markets.
VIP was a top-performer last week as shares gained 19.6%. Earnings estimates for this year are up 5.3% over the past two months and 2.2% over the past 30 days. Expectations for next year have also moved forward. In late November, the Russian mobile phone operator reported earnings per share that topped both the consensus and the year-ago performance, while revenue gained 44%.
Buckeye Technologies Inc. (NYSE: BKI) received a brokerage firm upgrade last week, which most likely helped this specialty fibers and nonwoven materials company make the top performers list for the week ended Dec 21. Shares of the company gained 19.4%. Over the past two months, earnings estimates for the year ending June 2008 are up 21%.
Buckeye Technologies is scheduled to report its fiscal second-quarter results in late January. For its fiscal first quarter, the company announced earnings per share that improved handily year over year while also topping the consensus by almost 3.6%. The improvement was attributed to a combination of higher prices, better mix and cost control. In addition, revenue improved 3% with an especially strong performance for nonwovens shipments.
L.B. Foster Company (NASDAQ: FSTR) is a leading manufacturer, fabricator and distributor of products and services for rail, construction, energy and utility markets. It was a top-performing Zacks #1 Rank company last week with a gain of 13.9%. Earnings estimates have moved forward by 10.7% over the past seven trading days. Expectations are also on the rise for the quarter that ends this month as well as next year.
Late October saw L.B. Foster report solid third-quarter results, including a 100% year-over-year increase in earnings per share from continuing operations to 64 cents. That was also enough to beat the consensus by 33.3%. Net sales advanced 42% to $135.8 million from $95.9 million. According to the company, sales for rail, tubular and construction products were very strong overall, while bottom line results as well as operating margins increased across all segments.
CF Industries Holdings, Inc. (NYSE: CF) is part of the hot fertilizer segment and enjoyed substantial margin improvements in both its nitrogen and phosphate segments during the third quarter. The company rode favorable industry conditions to an 18.8% rise in the week ended Dec 21, which was more than enough to be a top-performing Zacks #1 Rank. Earnings estimates for this year are up 24% from three months ago, including a gain of 4.6% in the past 30 days. Expectations for next year have also trended higher in those timeframes.
CF Industries announced third-quarter earnings per share of $1.50 in late October, which marked a positive surprise of almost 43% over the consensus. The result also surged on a year-over-year basis. Net sales increased more than 46% to $582.9 million, versus $398.6 million a year earlier. According to the company, the fourth quarter should display another strong performance thanks to this year’s large harvest, historically high crop prices, and the prospect of another excellent crop year in 2008.
Monsanto Company (NYSE: MON) announced in early November that fiscal first-quarter earnings per share would more than double from the year earlier. That quarterly report is now only a week away, scheduled for Jan 3, and earnings estimates are 84% higher than one month ago. Analysts now expect 35 cents for the quarter, compared to 19 cents 30 days ago. Anticipation for the quarterly results helped this seed giant become one of the top-performing Zacks #1 Ranks for last week, as shares gained more than 13.3%.
Thanks to that strong quarter, Monsanto also expects full-year 2008 earnings per share at the upper end of its previously announced range between $2.20 and $2.40. Looking even further out, the company expects significant organic growth over the next five years as demand continues to grow for its seed and trait products. In fact, Monsanto expects the gross profit potential of its business to double from the end of 2007 through 2012. Its growth is expected to result in an ongoing EPS growth rate in the mid-to-high teens over the next five years.
About the Zacks Rank
Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank stocks have generated an average annual return of +32%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have underperformed the S&P 500 by 129% annually (+5 % vs. +12%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
To view the current Zacks #1 Rank List and to see additional Zacks Rank resources, go to http://at.zacks.com/?id=3173.
Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of Zacks Rank stocks and highlights those stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=3168.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros by going to http://at.zacks.com/?id=3169.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
The performance of the Zacks Rank portfolios shown above for annual and year-to-date periods are the linked monthly total returns (price changes + dividends) of equal weighted hypothetical portfolios, consisting of those stocks with the indicated Zacks Rank, assuming monthly rebalancing and zero transaction costs. These are not the returns of actual portfolios. The hypothetical portfolios were created at the beginning of each month from January 1988 forward based on the values of the Zacks Rank available to Zacks' clients before the beginning of each month. The portfolios created monthly from 1988 through September 2006 exclude ADRS and are comprised of stocks that have the indicated Zacks Rank and were covered by at least two analysts at the time of the stocks inclusion in the portfolio. Starting in October 2006 and going forward, the portfolios are comprised of all stocks with the indicated Zacks Rank and do not exclude ADRs, which is more reflective of the list of stocks that customers will find on the Zacks web sites. 2007 returns are for the period of Jan 1 - Mar 31, 2007. These performance numbers have been audited from 1995 through 2003 by Autschuler Melovan, a division of American Express Financial.
The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor's. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.