Zacks Investment Ideas feature highlights: Lumber Liquidators, Meritage Homes, Everest Re Group and Potlatch

Zacks Investment Ideas feature highlights: Lumber Liquidators, Meritage Homes,
                        Everest Re Group and Potlatch

PR Newswire

CHICAGO, May 1, 2013

CHICAGO, May 1, 2013 /PRNewswire/ -- Today, Zacks Investment Ideas feature
highlights Features: Lumber Liquidators (NYSE:LL), Meritage Homes (NYSE:MTH),
Everest Re Group (NYSE:RE) and Potlatch Corporation (Nasdaq:PCH).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

4 Big Winners from This Earnings Season

We are just past the halfway mark for first quarter earnings season, and if
you just look at the percentage of positive earnings surprises, things have
been pretty decent.

So far a solid 68% of companies have delivered positive earnings surprises,
although earnings growth is a lackluster +2.5% year-over-year.

However, as Zacks Research Director Sheraz Mian has pointed out, there is one
glaring weak spot this earnings season: revenue.

Don't Forget the Top Line

While a strong percentage of companies have beaten Wall Street expectations on
the bottom line, only 38% of companies have delivered positive revenue
surprises this quarter. And year-over-year "growth" is -1.5%.

While earnings surprises may garner most of the attention, I'm much more
impressed by a company that beats on both the bottom line and the top line.
That's because earnings can often be "massaged" by management to clear the
quarterly hurdle set by Wall Street. But revenue is generally much less
susceptible (although not immune) to manipulation.

The Triple Play

Positive revenue and earnings surprises are great, but if management guidance
is weak and/or if analysts still revise their earnings estimates lower, a
stock can still be punished. The true winners from earnings season are those
who can deliver the coveted "Triple Play":

  oA positive earnings surprise
  oA positive revenue surprise, and
  oSignificant positive earnings estimate revisions

And as the well-documented "post-earnings announcement drift" shows, these
blow out quarters are often handsomely rewarded by the market for several
weeks after a company reports.

So which companies have delivered the "Triple Play" this earnings season? I
ran a screen in Research Wizard, and here are 4 of the top companies from the
list:

Lumber Liquidators (NYSE:LL)

EPS Surprise: +30%
Revenue Surprise: +7%
4-Week Change in 2013 Consensus: +10%

Lumber Liquidators is the largest specialty retailer of hardwood flooring in
North America. It is a Zacks Rank #1 (Strong Buy) stock.

Meritage Homes (NYSE:MTH)

EPS Surprise: +32%
Revenue Surprise: +6%
4-Week Change in 2013 Consensus: +17%

Meritage Homes is a U.S. homebuilder. It is a Zacks Rank #1 (Strong Buy)
stock.

Everest Re Group (NYSE:RE)

EPS Surprise: +36%
Revenue Surprise: +16%
4-Week Change in 2013 Consensus: +10%

Everest Re Group is a property and casualty insurer/reinsurer based in
Bermuda. It is a Zacks Rank #2 (Buy) stock.

Potlatch Corporation (Nasdaq:PCH)

EPS Surprise: +46%
Revenue Surprise: +2%
4-Week Change in 2013 Consensus: +21%

Potlatch Corporation is a Real Estate Investment Trust (REIT) with
approximately 1.4 million acres of timberland in Arkansas, Idaho and
Minnesota. It is a Zacks Rank #1 (Strong Buy) stock.

The Bottom Line

This earnings season has been decent, but these four companies each reported
outstanding quarters and are well-positioned to run higher over the coming
weeks.

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