Message #5 From:
NewsBot Date: March 29, 2007 03:00:00 AM
ABFS News Zacks Industry Rank Analysis Highlights: Arkansas Best, Global Partners, Holly Corporation, Werner Enterprises and Western Refining
CHICAGO--(BUSINESS WIRE)--Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week’s analysis include Arkansas Best (Nasdaq:ABFS), Global Partners (NYSE:GLP), Holly Corporation (NYSE:HOC), Werner Enterprises (Nasdaq:WERN) and Western Refining (NYSE:WNR). To see the Zacks Industry Rank and the trend in earnings estimates revisions for all 208 industry groups, visit http://at.zacks.com/?id=3154.
Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.
Have you noticed prices at the pump lately?
If you are finding that your language was a bit more, shall we say “colorful”, the last time you filled up your tank, you’re not alone. According to the Lunberg survey, gas prices are up 37 cents per gallon since the end of January. Last week, the national average was about $2.61 per gallon. Rising oil prices, increased demand and maintenance-related issues at refiners all have played a role. The good news is that gas prices are expected to start trending down soon (assuming the problems with Iran do not escalate).
The even better news is that earnings estimates for refiners moving higher – giving investors an opportunity to profit. During the past four weeks, 51 full-year profit forecasts have been raised on companies within Oil Refining & Marketing versus just 15 forecasts being cut. This Zacks Revisions Ratio of 3.4:1 compares to a ratio of just 0.7:1 for the entire Zacks Rank universe(a).
The rebound in crude prices that has occurred since mid-January may have brokerage analysts changing their minds about where oil prices will be at in 2007. Previously, estimates for multiple oil-related companies had been lowered on expectations that oil prices would be lower this year than last year. Since early February, however, crude hasn’t spent much time below $59.
Refiners not only benefit from higher oil prices, but they are also in a favorable position from a supply/demand standpoint. Refineries in the U.S. are operating at almost full-utilization. The sustained economic expansion should result in increased consumption of gasoline. These are big positives for companies whose earnings are dependant the size of the margins they can command.
There are currently three Zacks #1 Rank (“strong buy”) refiners: Global Partners (NYSE:GLP), Holly Corporation (NYSE:HOC) and Western Refining (NYSE:WNR). There are also four Zacks #2 Rank (“buy”) stocks.
Oil prices are hitting new highs for the year at the same time brokerage analysts are cutting their full-year forecasts on several trucking companies, including Arkansas Best (Nasdaq:ABFS) and Werner Enterprises (Nasdaq:WERN).
Rising fuel costs are a negative for transportation companies, but there are also other factors adversely affecting trucking companies. Weakness in the housing and automotive sectors are putting pressure on spot prices across the board as freight companies are becoming more competitive for market share. Some large retailers are tightening inventory control, resulting in a lower amount of shipments. The supply of vehicles has increased as companies sought to buy new trucks ahead of new EPA regulations that went into effect this year. Finally, rail continues to take market share away from long-haul carriers.
Transportation-Trucking contains two Zacks #5 Rank (“strong sell) stocks and eight Zacks #4 Rank (“sell”) stocks.
The interactive Zacks Industry Rank List allows you to see all of the companies, and their Zacks Rank, within more than 200 industries. See the list athttp://at.zacks.com/?id=3208.
(a)The Zacks Rank is assigned to companies with earnings estimates made available by brokerage analysts. The Zacks’ database contains earnings estimates for approximately 4400 companies.
About Zacks Industry Rank and the Zacks Rank
Zacks Industry Rank is calculated by averaging the Zacks Rank for all covered companies within a given industry. The Zacks Rank is assigned to approximately 4400 stocks and ranges from #1 (“Strong Buy”) to #5 (“Strong Sell”). Both the Zacks Industry Rank and the Zacks Rank are quantitative indicators designed to cover periods of 1-3 months.
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 +31.8%. 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 143.6% annually (+4.8% vs. +11.8%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
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About Zacks
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=2565.
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(a)The Zacks Performance Rank performance is the total return of equal weighted simulated portfolios consisting of those stocks with the indicated Zacks Rank net of fees. Results reflect the reinvestment of dividends and other earnings. Simulated results do not represent actual trading and may not reflect the impact that economic and market factors might have had on decision-making if an adviser were actually managing a client's money.
(b)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.
