Zacks Buy List Highlights: AutoDesk, Inc., Grey Wolf, Inc.,
Ceridian Corporation, and Children's Place
CHICAGO--(BUSINESS WIRE)--July 21, 2005 Zacks.com releases another list of stocks that are currently members of the coveted Zacks #1 Rank (Strong Buy) List. The #1 Rank stocks highlighted today are AutoDesk, Inc. (NASDAQ:ADSK) and Grey Wolf, Inc. (AMEX:GW). Further, Zacks announced #2 Rankings (Buy) on two other widely held stocks: Ceridian Corporation (NYSE:CEN) and Children's Place (NASDAQ:PLCE). To see the full Zacks #1 Rank (Strong Buy) List, or the rank for any other stock, visit: http://at.zacks.com/?id=88
Stocks ranked #1 (Strong Buy) by Zacks have produced an average annual return of +32.8% 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%.
Here is a synopsis of why ADSK and GW have a Zacks Rank of 1. Note that a #1 Strong Buy rating is applied to only 5% of all the stocks Zacks ranks:
AutoDesk, Inc. (NASDAQ:ADSK) sports a successful earnings track record. The company has topped analysts expectations each time over the past five consecutive quarters. In mid-May, the company posted fiscal first-quarter earnings of 30 cents per share outperforming its prior year result and jumping ahead of the consensus estimate by about 7%. Net revenues improved 19% year-over-year. AutoDesk mentioned that its performance was driven by strong growth in revenues from new seats and subscriptions, increasing penetration of its vertical and 3D products and continued improvement in profitability.
Grey Wolf, Inc. (AMEX:GW) will report second-quarter earnings on July 27, 2005. In late April, the company released first-quarter earnings of 10 cents per share, reversing last year's loss and surpassing the consensus estimate by almost 43%. Grey Wolf said it produced outstanding results for the first quarter as sustained strength in commodity prices supported increasing U.S. land drilling activity and dayrates. Earnings estimates for the year ending December 2005 moved up 14 cents, or about 41%, from three months ago.
Here is a synopsis of why CEN and PLCE have a Zacks Rank of 2 (Buy). Note that a #2 Buy rating is applied to 15% of all the stocks ranked by Zacks:
Ceridian Corporation (NYSE:CEN) reported first-quarter earnings in mid-May. The result matched the consensus estimate. The company mentioned that revenue in Human Resource Solutions (HRS) was on plan, up 14% over last year. CEN added that the major factors driving the year over year improvement in HRS were tighter cost controls, revenue growth, and higher interest income on float balances. Regarding Comdata's performance, CEN said it was better than expected with revenue up 13% over last year on continued strength in both the retail and transportation markets. Earnings estimates for the year ending December 2005 increased one penny, or approximately 1%, over the past 90 trading days.
Children's Place (NASDAQ:PLCE) recently announced that total consolidated sales for the month of June increased 75% over last year's total. Comparable store sales for The Children's Place stores increased 2%, on top of a 9% increase for the same period last year. The company also reiterated its fiscal 2005 earnings guidance of $2.15 to $2.25 per share. Analysts' most recent estimates are $2.27 per share, which is above three months ago levels by eight cents, or almost 4%. PLCE will report financial results for the fiscal second quarter on August 18, 2005.
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About the Zacks Rank
For over 16 years, 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 +32.8%. 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 155.5% annually (+4.65% vs. +11.88%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
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