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Brian.oco The Money Pit
Nov 9th, 2007, 2:10 pm
I'm not too big on recommending stocks to buy or sell, but I have no problem passing along some good stock tips from people who know what they're doing.

One of my favorite stock-picking services is Zacks (www.zacks.com). The company has a daily sheet called the Zacks Rank/Buy Stocks, that highlights some potential winners in the financial markets. Today is a good example -- their buy list has a little for everybody, with one aggressive growth stock, one growth & income stock, one momentum play, and one value play.

Let's have a look . . .

Aggressive Growth – Anaren, Inc. (Nasdaq: ANEN)

Anaren, Inc. is going on the offensive with its defense business. Additionally, the company just authorized an extra two million shares in its buyback program. Over the past week, this year's earnings estimates have increased two cents to 74 cents per share, while next year's estimates have jumped six cents to 90 cents per share. The company has exceeded estimates in three straight quarters.

Growth & Income – Herbalife, Ltd. (NYSE: HLF)

Herbalife, Ltd. recently posted third-quarter earnings per share of 67 cents, topping last year’s 51 cents and eclipsing the consensus estimate by nearly 5%. HLF raised its full year 2007 earnings per share guidance to be in a range of $2.62 to $2.64, and offered guidance for the fourth quarter of 2007 in the range of 72 to 74 cents. Analysts responded with increased forecasts. Herbalife is expected to grow by 12% over the next three to five years. With a current dividend yield of 1.8%, it stands above the industry average. The company’s return on equity (ROE) of 51% dwarfs the industry’s 10%.

Momentum – Diamond Foods, Inc. (Nasdaq: DMND)

Diamond Foods, Inc. reported weaker than expected earnings last quarter, primarily due to ending a defined benefit plan and higher advertising expenses. But in preparation for the upcoming holiday season, the processor of culinary and snack nuts has initiated a number of promotional campaigns with key partners to drive its holiday sales.

Value – Scholastic Corporation (Nasdaq: SCHL)

Scholastic Corporation is teaching its shareholders a lesson about making money. Its latest quarter posted an 85% positive surprise. Over the past 60 days, this year's earnings estimates have increased 12 cents to $2.70 per share. This would be a 90% increase over last year. The stock has a low price/book ratio of 1.4 and a price/sales of 0.6.

Zacks has a pretty good track record of picking winners. It's ranked stocks have, on average since 1988, returned 32% annually, and it does particularly well in down markets (44% returns from 2000-2002 when the S & P 500 fell 38%).

Just some food for thought on a brisk Friday on Wall Street.