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 Synaptics (NASDAQ: SYNA), NPS Pharmaceuticals, Inc. (NASDAQ: NPSP), AGCO Corporation (NYSE: AG), Baidu.com, Inc. (NASDAQ: BIDU) and Terra Industries, Inc. (NYSE: TRA). 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.
Synaptics (NASDAQ: SYNA) announced a solid fiscal first-quarter performance last week, sending the company to the top of the Zacks #1 Rank performers list with a gain of 20.7%. Net revenue in the quarter jumped approximately 58% to $86.7 million from $54.8 million. Furthermore, earnings per share more than tripled the previous year’s result. According to Synaptics, it continues to experience robust growth across its markets and ongoing momentum in new design activities.
Synaptics is a leading developer of human interface solutions for mobile computing, communications and entertainment devices. Over the past three months, earnings estimates for the fiscal year ending June 2008 are up about 21%. In addition to its quarterly performance, analysts also are encouraged by the company’s future potential, especially as it capitalizes on new market opportunities. Synaptics believes it is well positioned for record profits and revenue in fiscal 2008.
NPS Pharmaceuticals, Inc. (NASDAQ: NPSP) reported a third-quarter earnings per share profit, compared to a loss a year earlier. The company attributed this positive reversal to aggressive expense reduction measures, increased revenues from royalties and product sales, and gains for the sale of fixed assets related to site closures. Revenue jumped 190%. Shares of the company gained 19.75% for the week ended Nov 2, making it a top-performing Zacks #1 Rank company.
NPS Pharmaceuticals also updated its financial guidance. It now expects a 2007 cash burn between $70 million and $80 million, versus its previous guidance of $80 million to $90 million. This expectation excludes the net proceeds generated by new business development activities and financing transactions executed in 2007. Due in part to the reduced cash burn, the company also revised its previous year end cash balance guidance to between $130 million and $140 million, instead of $65 million to $75 million.
AGCO Corporation (NYSE: AG) capitalized on robust global farm equipment markets and put together an impressive third-quarter performance, including adjusted earnings per share that soared year over year to 77 cents from seven cents. The result also marked a positive surprise of approximately 156% over the consensus. Net sales advanced almost 37% to $1.61 billion from $1.18 billion. Such numbers helped shares of the agricultural equipment distributor rise 15.8% last week.
Thanks to higher commodity prices and increased farm income, AGCO expects global farm equipment demand to be improved from 2006. The company now expects earnings per share between $2.10 and $2.20 for the year. Earnings estimates for the full year are up 29% in just the past seven trading days.
Baidu.com, Inc. (NASDAQ: BIDU) was a top performer for all of October, and began a new month on a similar note. For the week ended Nov 2, the Chinese Internet search provider gained approximately 15.7%.
In late October, Baidu.com announced third-quarter earnings per share of 70 cents on total revenues of $66.3 million. Earnings more than doubled the year-earlier performance while revenues jumped by more than 100%. During the quarter, the number of active online marketing customers rose 11.6% to around 143,000 from the previous quarter. Also, revenue per online marketing customer increased about 11% sequentially.
Terra Industries, Inc. (NYSE: TRA) is a leading international producer of nitrogen products. The company gained approximately 8.8% last week to become a top-performance Zacks #1 Rank. Third-quarter revenues advanced to $594 million from $465 million in the third-quarter 2006, due primarily to higher nitrogen selling prices. In addition, earnings per share easily exceeded the year-earlier result.
Looking forward, Terra Industries stated that it is encouraged by forecasts for strong corn and wheat plantings driven by high prices for nitrogen-intensive crops. The company remains positive about its outlook for the rest of the year and the 2008 first half. Earnings estimates for this year are up 23% from three months ago.
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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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.
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