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 Innophos Holdings, Inc. (NASDAQ: IPHS), Alpha Natural Resources, Inc. (NYSE: ANR), CF Industries Holdings, Inc. (NYSE: CF), The Andersons, Inc. (NASDAQ: ANDE) and McMoRan Exploration (NYSE: MMR). 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.
Innophos Holdings, Inc. (NASDAQ: IPHS) was the top-performing Zacks #1 Rank company last week as shares surged almost 50%. The specialty phosphate producer announced second-quarter earnings of $2.74 per share, which trounced the consensus estimate by almost 215% while reversing a year-ago loss. Net sales moved higher by 73.8% year over year to $264 million from $112.1 million. IPHS stated that selling price increases had a positive impact on revenue across all product lines.
Earnings estimates for this year are currently about 32% higher than levels from two months ago. The company stated that it anticipating and rapidly responding to the dynamic rate of change in its markets.
Alpha Natural Resources, Inc. (NYSE: ANR) announced strong results for its second quarter on Jul 29, as the company achieved it’s highest-ever shipments and pricing for metallurgical coal. Excluding items, earnings reached 88 cents per share. That result beat the consensus by almost 63% while improving upon the year-earlier result of 7 cents. Total revenues reached $732.2 million, or 68% better than the prior year’s $435.3 million. Coal revenues advanced 63%.
In mid-July, Alpha agreed to be acquired by Cleveland-Cliffs, though recent news reports have indicated that ArcelorMittal is considering a counterbid. In just the past seven trading days, earnings estimates for this year have jumped approximately 13.5% on ANR. The company was a top-performing Zacks #1 Rank for the week ended Aug 1 as shares advanced almost 18.1%.
CF Industries Holdings, Inc. (NYSE: CF) benefited from high selling prices for nitrogen and phosphate fertilizer during the second quarter, helping the company put together year-over-year revenue growth of 37% to a record $1.16 billion. Excluding items, earnings per share of $4.10 eclipsed the consensus by almost 15.2%. It also marked a solid improvement from the previous year. Earnings estimates for this year are up 25% over the past two months, including a gain of 12.9% in the past seven trading days.
For the week ended Aug 1, shares of CF advanced 13.1%, which made it one of the best-performing Zacks #1 Rank companies. Looking forward, CF stated that tight global supply/demand balance, along with robust prices for major crops, suggest strong fertilizer demand for fall 2008 and spring 2009 application. Furthermore, analysts currently expect next year’s earnings to be about 28% better than this year’s.
The Andersons, Inc. (NASDAQ: ANDE), which is scheduled to report second-quarter results later this week, announced on Jul 30 that it now expects full-year earnings per share to beat its previous guidance. As a result, its earnings estimate for this year has moved sharply higher in the past seven trading days.
ANDE became one of the top-performing Zacks #1 Rank companies last week as shares gained almost 12.7%. The company now expects between $5 and $5.40 for the year, versus the previous estimate of $4.40 to $4.80. The increase was attributed to the continuing performance trend of its Plant Nutrient Group.
Shares of McMoRan Exploration (NYSE: MMR) moved ahead a little more than 9.7% last week, which was enough to make the company one of the top performing Zacks #1 Rank stocks. On Jul 17, MMR announced second-quarter earnings per share that reversed a year-ago loss while beating the consensus. Oil and gas revenues reached $372.3 million, compared to $45 million a year earlier. Daily production in the quarter averaged 294 million cubic feet of natural gas equivalents per day (MMcfe/d) net to the company, compared to 54 MMcfe/d a year earlier.
Earnings estimates for this year have advanced by approximately 19.8% over the past month. Analysts currently expect estimates in 2009 to be about 15.5% better than estimates in 2008. MMR stated that it’s positive about the outlook for its business, and is encouraged by results from its drilling activities as it works to build significant asset values through its focused exploration program.
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.
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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.
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