Stocks ranked #1 (Strong Buys) by Zacks have produced an average annual return of +32.9% since inception in 1988. During the recent Bear market from 2000 through 2002, the Zacks #1 Ranked stocks gained +43.8% while the S&P 500 tumbled -37.6%.
“Earnings estimate revisions are the most powerful force impacting stock prices.”
Here is a synopsis of why these stocks have a Zacks Rank of 1 (Strong Buy). Note that a #1 Strong Buy rating is applied to 5% of all the stocks Zacks ranks:
Research In Motion (NASDAQ: RIMM) recently announced that its BlackBerry(R) wireless platform has exceeded two million active subscribers. It took the company five years to establish the market and attract the first million users, but less than ten months to double that number. Late September saw the company report fiscal second quarter adjusted earnings of 45 cents per share, which topped the consensus by more than +4%. Earnings estimates for the year ending February 2005 are up 17 cents, or about +10% from two months ago, including a rise of 4 cents, or approximately +2%, in the past 30 trading days.
Sybase, Inc. (NYSE: SY) reported that total revenues increased to $198.7 million for the third quarter ended September 30, 2004, versus total revenue of $193.8 million for the third quarter of 2003. The company stated that growth in its data management and mobility solutions, combined with strong performance in certain geographies, helped them deliver better-than-expected results. Sybase also repurchased approximately $25 million worth of its stock during the 2004 third quarter, with $110 million of its current share repurchase authorization remaining.
Here is a synopsis of why these stocks have a Zacks Rank of 2 (Buy). Note that a #2 Buy rating is applied to 15% of all the stocks ranked by Zacks:
The Home Depot Inc. (NYSE: HD) reported nearly a +15% percent rise in third-quarter earnings on strong sales, particularly at stores open at least a year. For the three months ending October 31st, Home Depot said it earned $1.32 billion, or 60 cents a share, compared to a profit of $1.15 billion, or 50 cents a share, a year ago. Revenue in the quarter also rose +13.1% to $18.77 billion from $16.60 billion recorded in the same three-month period a year ago. Based on these results, Home Depot said it was raising its fiscal 2004 earnings per share growth outlook to 19% to 20% compared to its previous expected earnings per share growth for the year of 14% to 17%. The Board of Directors also authorized a third quarter cash dividend of 8.5 cents per share. This is the seventieth consecutive quarter the company has paid a cash dividend and is payable December 16, 2004, to shareholders of record on the close of business on December 2, 2004.
VeriSign, Inc. (NASDAQ: VRSN): On a non-GAAP, after tax, basis, VeriSign posted third quarter earnings of 19 cents per fully diluted share on revenue of $325 million. The earnings result beat the consensus by almost +19%, while revenue improved from about $268 million. Continued sequential growth in its core Internet and Telecom divisions, along with overachievement in its new mobile content business, had a positive impact in the quarter. Earnings estimates for the year ending December 2004 are up 4 cents, or about +6%, in the past month.
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About the Zacks Rank
For over 15 years, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988 the #1 Ranked stocks have generated an average annual return of +32.9%. During the recent Bear market from 2000 through 2002, the Zacks #1 Ranked 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). And since 1988 the S&P 500 has outperformed the Zacks #5 Ranked Strong Sells by 168.2% annually (11.8% vs. 4.4% respectively). Thus, the Zacks Rank system can truly be used to effectively manage the portfolio trading.
Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of Zacks #1 Ranked stocks highlighting those stocks poised to outperform the market. http://at.zacks.com/?id=90
The Zacks Rank, and all of its recommendations, is created by Zacks & Co., member NASD. Zacks.com displays the Zacks Rank with permission from Zacks & Co. on its web site for individual investors.
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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.
(a)The S&P 500 Index ("S&P 500") is a well-known, unmanaged index of the prices of 500 large-company common stocks selected by Standard & Poor's. The S&P 500 includes the reinvestment of all dividends, no transaction costs, and represents the gross returns before management fees.
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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