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S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

1

Market Snapshot





Friday November 19, 2010 (04:30 PM EST)

S&P Market Commentary

... Stocks closed higher, overcoming earlier price dips, as hope for a financial rescue of ailing Irish banks
carried over from the previous session, offsetting worries about
new steps taken by China to fight inflation and
slow its economy. With no U.S. economic data on today's or Monday's calendars, investors focused on
events abroad. Trading was slow going into the weekend. Tuesday will bring revised Q3 GDP figures. NYSE
brea
dth was 18
-
12 positive, NASDAQ breadth was 15
-
12 positive. Treasuries rose. The dollar index fell. Gold
futures were flat. Crude oil futures edged lower./B.Egli

The Outlook's Market Insight



Friday November 19, 2010 (05:00 PM EST)

Bonds Away


Bernanke s b
illions bode well for equities, commodities.



In the wake of QE2, the second round of quantitative easing by the Federal Reserve, professional investors
remain optimistic about riskier assets, specifically stocks and commodities.


Beyond increased liquidi
ty, we think the Fed s willingness to pump $600 billion into the economy, and
possibly more should it be needed, as signaled by its intent to regularly review the pace and size of QE2,
offsets investor anxiety regarding sluggish growth in the world s large
st economy, and helping fuel a rally in
risk assets, says Alec Young, an equity strategist for Standard&Poor s. In addition to stocks, commodities of
all stripes soared as the dollar weakened amid fears of rampant Fed money printing, in our view.

The S&P
Investment Policy Committee advises a 65% weighting to equities in its recommended asset
allocation. For specific ETFs and other asset allocation advice, please see the cover table.

Many asset management and mutual
-
fund firms also think stocks generally re
main undervalued.

Duane McAllister, vice president and investment manager at M&I Investment Management, says riskier
trading has been in vogue since the QE2 announcement, so if you were to pick asset classes that would do
well here, we think it is equities

and commodities.

It s kind of ironic since the Fed announced it will buy government bonds, quips McAllister, who is also the
portfolio manager of a municipal bond fund, the Marshall Intermediate Tax Free Fund (MITFX).

I wouldn t lend the federal governme
nt money for 10 years at 2.5%, says Mark Travis, the president of
Intrepid Capital Funds. As of November 8, the fund he co
-
manages, the Intrepid Capital Fund (ICMBX)
maintained about 18% in cash and Treasuries, 25% in corporate debt, and the rest, 57%, in
equities.

Even Gibson Smith, co
-
chief investment officer (CIO) of fixed
-
income investments at Janus Capital
Management, proclaims he is bullish on equities.

When I talk about equities it s kind of perverse coming from a fixed
-
income guy, but overall when y
ou look at
what we ve been through post
-
crisis the amount of liquidity in the system, there are reasons to be bullish
here, Smith says.

Although not all of the buy
-
side executives were in agreement over whether another round of quantitative
easing will be
necessary, they all agree that the Fed s QE2 plan to buy an additional $600 billion of longer
-
term Treasury securities from the market by the end of June 2011, if implemented, would be positive for the
vast majority of large quality multinationals over the

next year or two. The announcement alone reflected
positively on stocks. The markets applauded the November 3 Fed news by bidding up the S&P 500 nearly 2%
that day alone.

Managers at firms that manage a blend of funds point out that QE2 s effect on the st
ock market in the near
term should be the result of keeping money flowing in the system, holding down interest rates to ease debt
burdens and spur lending, and preventing prices on finished goods and services from depreciating further.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

2

I don t know how muc
h of QE2 is going to have an impact, but I consider it more of an insurance policy, says
Thomas E. Villalta, CFA, president and chief investment officer at Jones Villalta Asset Management.
Additional liquidity has the ability of being inflationary, but I t
hink QE2 is more of an insurance policy against
deflation and that has played well for the market over the last few days since QE2 was announced. he adds.

I think the purpose of QE2 is to prevent Japan 2, agrees Brian Barish, CFA, president and chief inves
tment
officer at Cambiar Investors. The Fed wants to avoid a structural weak period of growth in the U.S. that
begets stagnation and a liquidity crisis, just like what Japan experienced, he adds.

The longer
-
term view they espouse is that QE2 is very likely

to help boost equity prices over the next few
quarters. Gibson at Janus sees good valuations in the equity markets, and he expects those investors with
cash sitting in money market funds or fixed
-
income investors who learned bitter lessons in 2008 and 200
9 to
return to stocks for better returns over time.

The London Company s Managing Director Stephen Goddard, CFA, points out that many American
companies are offering cash
-
flow yields that are as high as or higher than bonds, an unusual scenario that
speaks

to the attractive relative value of stocks, and suggests that long term investors in stocks should enjoy
superior returns, especially relative to bonds, he wrote in a recent note to investors.

Fund strategists and asset managers agree that investors who w
ant to put new money to work in stocks just
need to be selective. Professional investors believe that certain stocks could reflect the effects of tighter
margins and lower profitability into 2012 due to commodity
-
price increases. Many buy
-
side participants

are
concerned that some companies, especially those that depend on slower
-
growth developed economies for
sales, may see their sales drop at the same time that their raw
-
material costs rise.

Isabelle Sender


S&P Editorial


S&P Stock Picks and Pans


Frida
y November 19, 2010 (04:00 PM EST)

SHIP FINANCE INTL, FRONTLINE LTD, HEINZ (H.J.), MEDCO HEALTH SOLUTIONS

S&P MAINTAINS HOLD RECOMMENDATION ON SHARES OF SHIP FINANCE
INTERNATIONAL(
SFL
21.93 *** ) : Ahead of Q3 results scheduled for release on November 23, we are
maintaining our Q3 EPS estimate of $0.63 versus year
-
ago $0.47, reflecting higher revenues. We believe the
company will be

able to maintain its quarterly dividend of $0.35 per share. We are maintaining our 2010 EPS
estimate of $2.57. We forecast that operating revenues will rise 5% to 6% in 2011 versus 2010, reflecting
improving rates. Our 2011 EPS estimate is $2.63. We are a
lso keeping our 12
-
month target price of $21,
based on an 8.1X multiple our '11 EPS estimate, below its peer average.


S&P MAINTAINS HOLD OPINION ON SHARES OF FRONTLINE LTD(
FRO
28.88 *** ) : Ahead of Q3 results
scheduled for release on November 24, we are maintaining our Q3 EPS estimate of $0.53 versus a year
-
ago
per share loss of $0.07. We believe the company will maintain its qu
arterly dividend of $0.75 per share. We
are keeping our 2010 EPS estimate of $3.25. We forecast that ship operating expenses will increase 7% to
9% in 2011 versus 2010. We keep our 2011 EPS forecast of $2.36. We are maintaining our 12
-
month target
price at

$30, based on our blend on our NAV valuation and 12.5X times our '11 operating EPS forecast, in
line with peers.


S&P REITERATES BUY OPINION ON SHARES OF H.J. HEINZ(
HNZ
47.79 **** ) : Oct
-
Q EPS from
continuing operations of $0.78, vs. $0.76, is $0.02 below our estimate. We see currency fluctuation adversely
affecting EPS in the quarter by $0.03. Also, we view volume growth of 0.3
% as lackluster. However, we are
pleased by extent to which gross profit margin widened. We are lowering our FY 11 (Apr.) EPS estimate to
$3.01 from $3.04, but keep FY 12's EPS projection of $3.27. We continue to expect emerging international
markets to be

an increasing part of future sales mix. We are keeping our 12
-
month target price of $51.
Indicated dividend yield is about 3.8%.


RETRANSMIT
-

S&P REITERATES STRONG BUY OPINION ON SHARES OF MEDCO(
MHS
59.95 ***** ) :


S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

3

Medco outlines a bright prognosis, with a goal of 16%
-
20% annual EPS growth through 2020. Key drivers
should be robust growth in higher margin mail order and generics
, as well as significant expansion in new
specialty drugs for cancer and immune disorders. Medco's mail order dispensing rate is expected to reach
80%
-
85% by 2020, up from 58% in 2009. Generics growth should be spurred by $90B in patent expirations
over 20
11
-
2020, including some $28B in 2012. We reiterate our 12
-
month target price of $70, which applies a
peer EBITDA/share P/E of 10X to our '11 EBITDA estimate.

Industry in Focus


Wednesday November 17, 2010 (02:00 PM EST)

SECTORS: POP
-
UPS HELP BRING SOME HO
LIDAY CHEER TO RETAIL LANDLORDS

Positive Potential Implications: SIMON PROPERTY GROUP INC. (
SPG
98.66 *****), TAUBMAN CENTERS
INC
. (
TCO
45.58 ***), DEVELOPERS DIVERSIFIED REALTY CORP. (
DDR
12.5 ***), CBL&ASSOCIATES
PROPERTIES INC. (
CBL
16.63 *****).


Although
few consumers are spending like its 2006 or 2007, we believe shoppers will keep there wallets open
this holiday season. For the 2010 holiday selling season, which spans November 2010 through January 2011,
Standard&Poor's projects that retail sales will inc
rease 2.5% to 3%, following the current trend in sales of
general merchandise, apparel, furnishings, and "other" goods (GAFO). While we expect yet another highly
competitive shopping season, we see department stores and outlets capturing share by offering
consumers
more choice, running longer promotions, and hiring more seasonal workers to ensure that both in
-
store and
online shoppers are well served. Kohl's (KSS 50 ****), for example, will hire over 40,000 associates this
holiday season, for a more than 20
% year
-
over
-
year increase.


We also expect pop
-
up stores to play an increasingly important role this holiday season (albeit still limited in
the grand scheme). While pop
-
ups have been around for many years, this year, the group has gained
increased attenti
on due to their growth. Toys R' Us, which last year opened 90 seasonal or pop
-
up stores,
announced that it would open 600 this year and hire 10,000 seasonal employees to staff these stores. For a
retailer, such as Toys R' Us, which generates about 40% of s
ales in the fourth quarter (and we estimate a
higher figure if you strip out Babies R' Us), these stores are a good way of matching retail supply with
consumer demand. Retailers such as Calendar Club, Go! Games, Go! Toys, and Spirit Halloween stores, as
we
ll as countless "mom and pop" Halloween stores, are others that take advantage of seasonal shopping
patterns.


We believe that such leasing benefits retail landlords in numerous ways. First, it allows the landlord to collect
rents on space that might other
wise sit vacant or be leased at an undesirable long
-
term rent. Second,
temporary leasing affords the landlord an opportunity to drive traffic to the center, which benefits the overall
property. Third, such leasing affords both the tenant and the owner an o
pportunity to see if a given location
makes sense on a long
-
term basis. CBL&Associates (CBL 16 *****) and Simon Property Group (SPG 97
*****), among others, have indicated they have had success in converting a number of pop
-
up/temporary
leases to permanent

ones. It also gives the landlords a chance to generate income and fill spaces as they
become available, often before permanent tenants would normally start construction in the first or second
quarter.


Although we expect temporary leasing to remain a rela
tively small contributor to the bottom line for retail
REITs, we believe that it represents another means for retail landlords to cushion the blow of elevated
vacancy levels. Developers Diversified (DDR 12 ***), a major owner of shopping centers, noted tha
t it would
generate about $3 million in revenue from leasing temporary space to stores in the Halloween and toy
categories, but not much for a company with 2009 revenue of $819 million
-

but still meaningful at a time
when retail landlords are trying to re
-
build occupancy levels. At DDR, for example, even though the core
portfolio leased rate improved to 92% at the end of 2010's third quarter from 90.9% last year, it was still a far
cry from 2007's third quarter rate of 95.9%. We also note that landlords pr
ovide little if any tenant
improvement concessions for a temporary space, which helps minimize costs associated with the space and
rental income stream.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

4


REITs generally do not include temporary leasing or pop
-
ups in their reported leasing statistics. Howe
ver,
Taubman Centers (TCO 44 ***) noted that its temporary leasing program was strong in the 2010 third quarter.
It also added that temporary occupancy accounted for 4.1% of tenant area in its regional malls, and if this
number were added to its permanent
occupancy statistic, it would be nearly 93% occupied at the quarter's
end. TCO's management noted that temporary leasing would likely approach 5% by year
-
end, a record for the
company. They also pointed out that the timing has been opportune, as it allowed

the company to fill spaces
as they become available.


ROBERT MCMILLAN, S&P Equity Analyst

S&P Focus Stock of the Week


Update on 15
-
11
-

2010





STARS Changes



Date

Symbol

Company Name

New

Ranking

Old

Ranking

Reason

11/18/10

BKE

Buckle

Inc



Valuation


11/18/10

CVC

Cablevision

Sys



Rainbow programming netwo
rks spin
-
off


11/18/10

CAH

Cardinal

Health



Valuation


11/18/10

FFG

FBL

Financial

G



Valuation


11/18/10

NTAP

NetApp

Inc



Stronger deamnd, gain in market share


11/18/10

PLCM

Polycom

Inc



Valuation


11/18/10

SJM

Smucker

(J.M.)



Possible margin pressure in coffee biz


11
/18/10

YHOO

Yahoo

Inc



Valuation


11/17/10

ATI

Allegheny

Techn



Valuation


11/17/10

CATY

Cathay

General



Valuation





S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

5

11/17/10

CYT

Cytec

Indus



Valuation


11/17/10

F

Ford

Motor



Valuation


11/17/10

NFLX

NetFlix

Inc




Added to Stars


11/17/10

PTV

Pactiv

Corp




Acquired by Reynolds Grp Hldngs


11/16/10

BBL

BHP

Billiton

pl



Valuation


11/16/10

EIX

Edison

Intl



Valuation


11/16/10

MPWR

Monolithic

Powe



Valuation


11/16/10

PBR

Petroleo

Brasil



Valuation


11
/16/10

PSYS

Psychiatric

Sol




Acqrd by Universal Health Servcs (UHS)


11/16/10

RDN

Radian

Group



Completes public offering


11/16/10

TCH

Technicolor

ADS




No longer followed analytically


11/16/10

TJX

TJX

Companies



Valuation


11/15/10

BUCY

Bucyrus

Interna



Valuation


11/15/10

ISLN

Isilon

Systems



Valuation


11/12/10

MSCC

Microsemi

Corp



Valuation


11/12/10

NVDA

NVIDIA

Corp



Valuation


11/11/10

CSCO

Cisco

Systems



More challenging climate





Economic Calendar




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

6


Friday November 19, 2010 (07:16 AM ET)

Calendar of Upcoming Economic Events






AE

Street











Date

Time

Release

For

Forecast

Median

Last










11/18/10

08
:30
US

Initial Claims 11/13


439K A

442K

437K R










11/18/10

08:30
US

Cont Jobless Clms 11/06


4,295K A


4,343K
R










11/18/10

10:00
US

Philadelphia Fed Index

NOV

22.5 A

5.0

1.0










11/18/10

10:00
US

Leading Indicators

OCT

0.5% A

0.
5%

0.5% R










11/18/10

10:30
US

EIA Natur Gas Stks
11/12


3B A


19B










11/18/10

16:30
US

M2
-

Week Ended 11/08


$16.0B A


$22.4B









Economic Brief

Thursday November 18, 2010 (12:00 PM EST)

S&P WEEKLY ECONOMICS CALL

North Americ
a: Both the Group of 20 (G
-
20) meeting this week and the report of the bipartisan deficit
commission showed the political difficulties of the steps needed to correct the gross imbalances in the global
economy. At the G
-
20 meeting in Seoul, surplus countrie
s objected to the U.S.'s quantitative easing (QEII)
policy because it threatens their continued surplus. The right condemned the deficit commission's proposals
because they would raise taxes, and the left condemned them for cutting Social Security. But nei
ther ext
reme
offered any alternative.



-
The St Louis Federal Reserve's Bullard said the $600 billion QEII program will be adjusted as the data come
in, and there's a possibility that all $600 billion in Treasuries are not purchased (that was already indic
ated by
the Federal Open Market Committee's statement). New York Fed President Dudley said critics of the QEII "do
not understand clearly" the plan and underestimate the Fed's ability to rai
se rates when the time comes.



-
Producer prices rose 0.4% in Octo
ber, led by a 3.7% jump in energy prices. Excluding food and energy,
prices plunged 0.6%. The consensus estimate was a 0.8% rise in overall prices and a 0.1% rise excluding
food and energy. Food prices fell 0.1%. Intermediate goods prices jumped 1.2% in Oc
tober (up 0.6% core),
while crude prices jumped 4.3% (up 2.1% core), as both crude foodstuffs (up 4.3%) and industrial
commodities (up 4.2%) jumped. The decline in the core rate was heavily influenced by lower motor ve
hicle
and electronics prices.


-
Consum
er prices rose 0.2% in October, but were flat excluding food and energy. The data were close to the
consensus estimates of up 0.3% and up 0.1%, respectively. Over the past 12 months, the consumer price
index (CPI) is up 1.2%. Meanwhile, the CPI, excluding
food and energy, is up 0.6%, the smallest price
increase since 1957, when the government started recording data. The continued low inflation will help
convince the Fed to k
eep its QEII in place.



-
Industrial production was flat in October, as a 3.4% drop
in utility production offset a 0.5% rise in


S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

7

manufacturing output. The market had expected a 0.4% rise in production. Manufacturing's 0.5% rise was led
by a 2.2% rise in electronics and a 1.6% rise in motor vehicles. Industrial production held at 74.8%, but

manufacturing utilization rose to 72.7% from 72.3% in September. The West and the South saw sharp month
-
over
-
month declines; the Northeast and Midwest were up. Building permits rose 0.5% to 550,000 from a
547,000 pac
e in September (was 539,000).


-
U.S. ho
using starts dropped 11.7% to a 519,000 pace (annualized) in October, well below the 594,000 rate
expected by the consensus and after September was downwardly revised to 588,000 (previously 610,000).
Housing starts were down 1.9% from last October. Multi
-
f
amily starts plunged 43.5% to 83,000 in October,
while single family starts edged

down 1.1% to a 436,000 pace.



-
Consumer sentiment (as measured by a University of Michigan survey) rose to 69.3 in early N
ovember from
67.7 in October.



-
U.S. bankruptcy fi
lings were up 11% in the first nine months of 2010 from the same period in 2009. Business
bankruptcies dropped 6%, but consumer bankruptcies rose 12%.

Word On The Street

Friday November 19, 2010 (04:00 PM EST)

DECKERS OUTDOOR CORP., RPC INC., ANNTAYLOR ST
ORES CORP.

JEFFERIES INITIATES COVERAGE OF DECKERS OUTDOOR (DECK) WITH BUY, $75 TARGET(
DECK
) :
Analyst Taposh Bari tells salesforce cont
inues to see DECK's UGG brand as a double
-
digit growth story with
potential for 20% annual revenue growth over next 3
-
5 years. Says '11 is set to be an inflection in UGG
brand's international trajectory as it assumes direct control in U.K. and Benelux, its

two largest non
-
U.S.
regions. Retail, meanwhile, has been on fire with room to grow materially from it's 10% contribution to sales.
Also sees co.'s strong balance sheet as powerful tool in mgmt's quest to generate shareholder value. Sees
$3.70 '10 EPS, $4
.32 '11. M.Morrow


GOLDMAN INITIATES COVERAGE OF RPC INC. (RES) WITH SELL, $21 PRICE TARGET(
RES
) : Analyst
Dimitry Dayen tells salesforce

market for U.S. pressure pumping remains very tight, stocks are near all
-
time
highs and Street estimates imply that the cycle goes through 2012. However, would not be aggressive on
RES as pressure pumping is highly cyclical and barriers to entry are low.
Expects capacity additions and a
flattish rig count to cause margins to peak in Q2 2011 and his cyclical framework suggests that now is the
time to sell these stocks and rotate into international peers, which are at the trough of their cycle. M.Morrow


ANN
TAYLOR (ANN) REPORTS SOLID Q3 RESULTS. JANNEY RAISES ESTS, TARGET, KEEPS
BUY(
ANN
) : Analyst Adrienne Tennant tells salesforce ANN posted $0
.42 Q3 pro forma EPS vs. Street's
$0.34; beat driven by strong performance at Ann Taylor brand, which posted ~22% increase in same
-
store
sales. Thinks top
-
line expansion driven by improved product offerings, higher full
-
price selling at Ann Taylor
brand, e
ffective marketing strategies. Commends mgmt on success of turning back to positive comps
throughout year; dramatic product improvements; ongoing cost, inventory control. Raises $1.19 FY 11 (Jan.)
EPS est. to $1.27, $1.42 FY 12 to $1.58; $26 target to $30.

M.Morrow


Market Movers

Friday November 19, 2010 (04:00 PM EST)



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

8

Movers: MELA SCIENCES, INC.,MARVELL TECHNOLOGY GROUP LTD.,DEL MONTE FOODS CO.

MELA SCIENCES, INC.(
MELA
) : MELA announces that the General and Plastic Surgery Devices Panel
appointed by the FDA voted by majority that, for its proposed indications, MelaFind is safe and effective and
that its benefits outweigh the risks. MelaFi
nd is a non
-
invasive and objective multi
-
spectral computer vision
system designed to aid physicians in detection of early melanoma. Leerink Swann raises target, reiterates
outperform.See


MARVELL TECHNOLOGY GROUP LTD.(
MRVL
) : MRVL posts $0.45 vs. $0.35 Q3 non
-
GAAP EPS on 20%
higher net revenue. Notes non
-
GAAP EPS excludes the effect of stock
-
based compensation, amortization
and write
-
offs
of acquired intangible assets, restructuring costs and certain other expenses or benefits. The
Street was looking for $0.43 EPS. S&P keeps hold. Deutsche Bank maintains buy.See


DEL MONTE FOODS CO.(
DLM
) : Financial Times reports: KKR&CO. is in advanced talks about a deal to
take private DLM, the US food and pet products company. People familiar with the matter said KKR had been
discussing a b
uy
-
out with DLM for several months and that a deal could be agreed within weeks. The two
sides are discussing a price of about $18.50 a share, those people added, which would value the company at
close to $3.6B. DLM also has about $1.3B of net debt.


SALES
FORCE.COM, INC.(
CRM
) : CRM posts $0.32 vs. $0.28 Q3 non
-
GAAP EPS on 30% revenue rise.
Street was looking for EPS of $0.31. Sees Q4 revenu
e of $447M
-
$449M, non
-
GAAP EPS of $0.27
-
$0.28.
Raises FY 11 revenue guidance to $1.647B
-
$1.649B, non
-
GAAP EPS is seen at $1.18
-
$1.19. S&P ups
estimates, target; keeps hold. Wedbush ups estimates, target; keeps outperform.See


FOOT LOCKER, INC.(
FL
) : FL posts $0.33 vs. $0.10 adjusted Q3 EPS on 8.1% higher same
-
store sales,
5.4% higher total sales, wider gross margin. Street was looking for EPS
of $0.17. S&P raises estimates,
target; maintains hold.See


INTUIT INC.(
INTU
) : INTU posts $0.12 Q1 loss vs. $0.10 loss despite 12% rev.

rise. Q1 loss was in line with
Street view. Reiterates FY 11 guidance for rev. of $3.74B
-
$3.84B, growth of 8%
-
11%, non
-
GAAP EPS of
$2.36
-
$2.43 (vs. Street's $2.41). Sees Q2 rev. of $920M
-
$940M, non
-
GAAP EPS of $0.36
-
$0.40. S&P
maintains hold. Pacific Cres
t keeps sector perform.See


ANNTAYLOR STORES CORP.(
ANN
) : ANN posts $0.42 vs. $0.20 Q3 EPS (excl. charges) on 12% higher
same
-
store sales

(SSS), 9.3% higher total sales. Street was looking for $0.34. Expects Q4 total sales to
approach $500M, reflecting mid
-

to high
-
single digit SSS performance, incl. double
-
digit SSS performance at
Ann Taylor brand, low
-
single
-
digit SSS increase at LOFT. Al
so expects FY 11 total sales to approach
$1.965B. S&P keeps hold. Janney raises estimates, target, reiterates buy.See


NIKE, INC.(
NKE
) :
NKE announces that its Board of Directors raised the quarterly cash dividend 15% to
$0.31 per share.


DECKERS OUTDOOR CORP.(
DECK
) : Jeff
eries initiates coverage of DECK with buy. Co. unavailable.


RPC, INC.(
RES
) : Goldman initiates coverage of RES with sell. Co. unavailabl
e.See


HIBBETT SPORTS, INC.(
HIBB
) : HIBB posts $0.44 vs. $0.30 Q3 EPS on 13% higher same
-
store sales
(SSS), 15% higher total sales. Stre
et was looking for $038. Raises FY 11 EPS forecast to $1.63
-
$1.66, which
equates to $0.47
-
$0.50 EPS, mid
-
single
-
digit increase in SSS for Q4. S&P ups estimates, target; keeps hold.
Needham places estimates, target under review; keeps buy.See


CVR ENERGY, I
NC.(
CVI
) : CVI announces the pricing of a registered underwritten secondary public offering
of 18M common shares by certain of its stockhol
ders at a public offering price of $10.75 per share. No shares
were sold by co. and it will not receive any proceeds from the offering. Says certain selling stockholders have
granted the underwriters a 30
-
day option to purchase up to an aggregate of 2.7M a
dditional common shares.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

9


SUNPOWER CORP.(
SPWRA
) : Wedbush downgrades to underperform from neutral. Yesterday co.
announced '11 guidance

for revenue of $2.65B
-
$2.85B, non
-
GAAP EPS of $1.75
-
$2.05.


AUTODESK, INC.(
ADSK
) : ADSK posts $0.32 vs. $0.26 Q3 non
-
GAAP EPS on 14% re
venue rise. EPS were
in line with Street view. Expects FY 11 revenue to growth 12%
-
13% to $1.924B
-
$1.944B, non
-
GAAP EPS to
growth 28%
-
31% to $1.27
-
$1.30. EPS seen below Street's $1.31. For Q4, sees non
-
GAAP EPS of $0.30
-
$0.33 on revenue of $500M
-
$520M. S&P

cuts estimate, keeps hold.See


CHINAEDU CORP.(
CEDU
) : CEDU posts $0.125 vs. $0.084 Q3 non
-
GAAP earnings per ADS on 13% higher
net reven
ue. GAAP EPADS totaled $0.109 vs. $0.067. Also, says Lily Liu has resigned as chief financial
officer for personal reasons, effective Nov. 30, 2010. The CEDU board has appointed its financial controller,
Min Yang, as vice president of finance and acting ch
ief CFO until a permanent appointment is made. For Q4,
CEDU sees net revenue totaling $14.8M
-
$15.8M.


CENTRAL GARDEN&PET CO.(
CENTA
) : C
ENTA posts $0.14 Q4 loss vs. $0.12 EPS on 4% sales decline.
Posts $0.02 non
-
GAAP loss, vs. Street's view of $0.14. Sales of branded products decreased 7% to $291M
and sales of other manufacturers' products increased 8% to $56M.


BLUE COAT SYSTEMS, INC.(
BCSI
) : BCSI posts $0.38 vs. $0.29 Q2 non
-
GAAP EPS on 1% higher revenue,
a lower effective tax rate (27% vs. the year
-
ago's 30%). Says, whi
le its non
-
GAAP EPS, operating margin and
cash flow from operations were good, revenue growth was "lower than what we are capable of delivering."
For Q3, sees $121M
-
$128M net revenue, $0.33
-
$0.39 non
-
GAAP EPS, a non
-
GAAP tax rate of 27%.


SOMAXON PHARMACEU
TICALS, INC.(
SOMX
) : SOMX announces that it intends to offer shares of its
common stock in an underwritten public offering.


KIRKLAND'S,

INC.(
KIRK
) : KIRK posts $0.11 vs. $0.27 Q3 EPS on 2.4% lower same
-
store sales (SSS), 0.4%
lower total sales. Street was looking for $0.
12. Expects total sales for FY 11 to increase in the range of 2%
-
4%, which would imply a mid
-
to
-
high single
-
digit decrease in SSS for Q4. Sees Q4 EPS of $0.66
-
$0.70 which
would equate to FY 11 EPS of $1.25
-
$1.29. Street is looking for $1.42.


SHENGKAI INNO
VATIONS, INC.(
VALV
) : VALV says it is commencing a public offering of common shares.
Global Hunter Securities LLC and Maxim Group LLC ar
e acting as the joint book runners for the offering. A
registration statement relating to the ordinary shares was declared effective by the Securities and Exchange
Commission (SEC) on Oct. 25, 2010. A prospectus supplement relating to the offering will be
filed with the
SEC.

Fund Strategies


Update on 11
-
11
-

2010


Neural Fair Value 25 Additions


Update on 7
-
9
-
2010



Neural Fair Value 25 Deletions


Update on 7
-
9
-
2010



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

10


High Yield Stocks


High Yielding 3/4/5 Star Stocks

(as of 11/15/2010 close)

Company Na
me

Symbol

Yield%

HOSPITALITY

PROPERTIES

TRUST

HPT

8.0

CENTURYLINK,

INC.

CTL

6.8

BANCORPSOUTH,

INC.

BXS

6.4

PITNEY

BOWES

INC.

PBI

6.2

ALTRIA

GROUP,

INC.

MO

6.1

FIRSTENERGY

CORP.

FE

6.1

REYNOLDS

AMERICAN

INC.

RAI

6.0

HEALTH

CARE

REIT,

INC.

HCN

5.9

AT&T

INC.

T

5.8

NATIONAL

RETAIL

PROPERTIES,

INC.

NNN

5.7

HCP,

INC.

HCP

5.6

CINCINNATI

FINANCIAL

CORP.

CINF

5.3

ENTERPRISE

PRODUCTS

PARTNERS

L.P.

EPD

5.3

PPL

CORP.

PPL

5.3

EXELON

CORP.

EXC

5.2

HUDSON

CITY

BANCORP,

INC.

HCBK

5.1

NATIONWIDE

HEALTH

PROPERTIES,

INC.

NHP

4.9

WINTHROP

REALTY

TRUST

FUR

4.9





S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

11

BRISTOL
-
MYERS

SQUIBB

CO.

BMY

4.8

CONSOLIDATED

EDISON,

INC.

ED

4.8

DTE

ENERGY

CO.

DTE

4.8

SOUTHERN

CO.

(THE)

SO

4.7

DPL

INC.

DPL

4.6

SOVRAN

SELF

STORAGE,

INC.

SSS

4.6

ENTERGY

CORP.

ETR

4.5

MERCK

&

CO.,

INC.

MRK

4.4

PAYCHEX,

INC.

PAYX

4.4

REGENCY

CENTERS

CORP.

REG

4.4

KIMCO

REALTY

CORP.

KIM

4.3

LOCKHEED

MARTIN

CORP.

LMT

4.3






S&P Platinum Portfolio






Return Year To Date through
10/31/2010


Patinum Portfolio

S&P 500

+8.0

+6.11



See Below For Historical Performance


Company Name

Ticker

11/19/2010

FairVal

Price

FVal

Star Ranking




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

12

Aeropostale

Inc

ARO

32.70

23.90

5



Arrow

Electronics

ARW

41.20

30.00

5



Aspen

Insurance

Hldg

AHL

44.60

29.10

5



Avnet,

Inc.

AVT

39.30

30.90

5



Brocade

Communic

Sys

BRCD

7.20

5.70

5



CVS

Corp
.

CVS

40.00

30.20

5



Chevron

Corp.

CVX

90.60

85.40

4



Chico's

FAS

CHS

10.60

10.20

4



Cisco

Systems

CSCO

24.20

20.10

5



Coac
h

Inc

COH

54.10

51.60

4



Computer

Sciences

CSC

56.90

46.90

5



E
MC

Corp.

EMC

22.50

21.70

4



Express

Scripts

ESRX

59.20

52.20

5



ExxonMobil

XOM

70.70

71.00

4



Fiserv

FISV

63.90

55.10

5



G
ameStop

Corp'A'

GME

32.00

20.80

5



General

Mills

GIS

32.40

36.30

2



Gilead

Sciences

GILD

47.90

37.80

5



ITT

Industries

ITT

52.60

46.90

5



International

Business

IBM

167.50

143.70

5




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

13


JPMorgan

Chase

&

Co

JPM

40.80

39.60

4



Jacobs

Engineering

Grou

JEC

44.30

41.70

4



Johnson

Controls

JCI

31.60

36.50

2



MEMC

Electronic

Materia

WFR

17.80

13.00

5



Medtronic,

Inc.

MDT

5
1.00

34.60

5



MetroPCS

Communic

PCS

14.60

12.10

5



NICE
-
systems*

ADS*

NICE

32.80

31.90

4



New

York

Community

Banc

NYB

16.50

16.80

3



Noble

Corp.

NE

44.00

36.90

5



Oracle

Corp.

ORCL

35.60

28.30

5



Rio

Tinto

plc

ADS*

RIO

73.60

69.50

4



Sanmina
-
SCI

Corp.

SANM

13.00

11.50

5



State

Street

Corp.

STT

48.40

43.90

5



Transocean

RIG

76.60

67.70

5



Travelers

Cos

TRV

56.80

56.30

4



Under

Armour'A'

UA

42.60

50.50

2



Wal
-
Mart

Stores

WMT

57.80

54.10

4



Western

Digital

WDC

37.80

32.60

5



Willis

Gro
up

Holdings

WSH

36.40

33.00

5





S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

14

Worthington

Industries

WOR

17.70

16.10

5




Platinum Portfolio Performance


Year

Platinum(%)

S&P 500(%)

2009

34.23

23.45


2008

-
44.47

-
38.49


2007

4.85

3.53


2006

12.97

13.62


2005

10.63

3.0


2004

10.74

8.99


2003

45.45

26.38


2002

-
35.52

-
23.37


2001

-
0.27

-
13.05


2000

18.61

-
10.14


1999

75.98

1
9.53


1998

20.54

26.67


1997

17.42

31.01


1996

34.32

20.26




Analyst Blog


Novatel

Launches

HSPA+

USB

Modems




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

15

Posted Fri Nov 19, 06:21 pm ET

Novatel Wire
less Inc.

(
NVTL
) yesterday announced the launch of its compact and light
-
weight DC
-
HSPA+
USB modem on Bell Mobility's Dual
-
Cell HSPA+ (DC HSPA+) network. The Ovation MC547 USB modem is
based on the 3GPP R
elease 8 standard and will provide the next
-
generation, high
-
speed mobile environment.

By providing theoretical peak downlink data rates of up to 42 Mbps and 11 Mbps on the uplink, DC
-
HSPA+
will enable carriers to upgrade their existing infrastructure equi
pment and achieve significantly higher
bandwidths.

Despite providing disappointing results, Novatel provided an extremely strong financial outlook for the ensuing
fourth quarter. For fourth quarter 2010, management expects revenues to be in the range of $1
10 million
-

$115 million. Gross margin will be around 19%
-
20%. Non
-
GAAP EPS is expected in the range of 2 cents to 5
cents.

Recently, wireless giant,
AT&T Inc.

(
T
) joined hands with Novatel to provide Novat
el’s MiFi mobile hotspot
that supports up to five devices at once connecting via WiFi.
Verizon Wireless

(
VZ
) and
Sprint

Nextel Corp.

(
S
) have already been of
fering MiFi gadgets of Novatel.

Verizon Wireless also started selling
Apple Inc
’s (
AAP
L) 3G iPad bundled with Novatel’s MiFi wireless
hotspots from October 28, 2010. We believe that this will considerably
benefit Novatel in the long run.

Currently, Novatel is a short
-
term Zacks #2 Rank (Buy) stock. Nevertheless, we maintain our long
-
term
Neutral recommendation. Novatel faces stiff competition from
Sierra Wireless

Inc.

(
SWIR
), which lost the
mobile hotspot battle, but beat Novatel to the 4G acess cards when Sprint came out with Sierra's Overdrive
hotspot earlier this year.

HTC's EVO 4G handset, which is based on
Google Inc.
's (
GOOG
) Android operating system with in built MiFi
mobile hotspot functionality, became the first 4G smartphone through Sprint.

Walter

to

Buy

Canadian

Co
mpany


Posted Fri Nov 19, 06:15 pm ET

U.S. coal miner
Walter Energy Inc.

(
WLT
) has proposed to acquire Canada’s Western Coal Corp. for
CAD$11.50 per share in a cash and stock deal, with an eye to create a

coal behemoth tapping the rising
demand from Asian Steel
-
makers.

Walter Energy has entered into a purchase agreement to buy roughly 54.5 million (19.8%) of the outstanding
Western Coal shares owned by affiliate Audley Capital. Walter Energy will pay CAD$1
1.50 per share or a
total consideration of CAD$630 million (USD$615 million) for acquiring Audley’s stake in Western Coal.

Under the agreement, Walter Energy will acquire shares from Audley in two parts


first, roughly 25.3 million
shares for cash; and th
en, will acquire the remainder of the stake in cash or stock immediately upon the
acquisition of Western Coal by Walter Energy, no later than April 30, 2011.

The total enterprise value of the proposal for Western Coal, including the purchase from Audley Ca
pital, is
CAD$3.3 billion (USD$3.2 billion).

With regard to the proposal, the companies have agreed to work exclusively to reach a definitive agreement
by December 1, 2010. According to the deal, neither side incurs any penalty in the event of deal failure
. A
deal is also subject to approval by Western's holders and clearance by regulators.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

16

On successful completion of the deal, Walter expects to have geographically diverse assets in Canada, the
U.S. and the U.K. The company expects to become a 'pure
-
play' m
etallurgical coal producer with strong
market positions in Asia, South and North America and Europe.

The combined company, on a pro forma basis, would have total coal reserves of about 385 million tons. On a
stand
-
alone basis, Walter Energy and Western Coa
l anticipate a rise in production to 9.5 million tons in 2012
and 11.0 million tons in March 2013, respectively. We expect the merged company to gain from the synergies
of elevated production and reserves along with the anticipated strength in the global m
etallurgical coal
markets.

Tampa, Florida
-
based Walter Energy is one of the leading U.S. producers and exporters of premium
metallurgical coal to the global steel industry in the United States. Walter Energy currently produces
approximately 7.0 million ton
s of premium metallurgical coal.

Walter’s operating earnings for the third quarter of 2010 came in at $2.57 per share, slightly below the Zacks
Consensus Estimate of $2.59 but well above the year
-
ago earnings of 45 cents per share. We expect the
operating
earnings for fiscal 2010 and 2011 to be $7.74 and $10.41, respectively.

Walter Energy currently has a short term Zacks #3 Rank (Hold). Its closest peers
Arch Coal Inc.

(
ACI
) and
Massey Energy Co.

(
MEE
) also carry a Zacks #3 Rank.

St.

Jude

Wraps

Up

AGA

Acquisition


Posted Fri Nov 19, 06:05 pm ET

St. Jude Medical

(
STJ
) has officially completed its acquisition of cardiac devices maker AGA Medical
Holdings. This follows the recent federal antitrust clearance of the deal. Pursuant to the agreement, AGA
Medical has been merged w
ith St. Jude’s wholly
-
owned subsidiary Asteroid Subsidiary Corporation.

St. Jude announced its acquisition of Plymouth, Minnesota
-
based AGA Medical for $1.3 billion in October
2010. The deal value includes the assumption of $225 million of AGA Medical debt
. Under the deal,
shareholders of AGA Medical were offered $20.80 (in the form of cash and/or stock) for each share they hold.

Following the acquisition, 50% AGA Medical shares surrendered in the merger were converted into the right
to receive $20.80 in ca
sh while the remaining 50% receiving 0.54 of a share of St. Jude’s common stock for
each share of AGA Medical common stock.

AGA Medical specializes in making devices for treating structural heart defects and vascular abnormalities
with minimally invasive t
ranscatheter treatments with revenues of $199 million in 2009. Many of the
company’s products are used to treat heart defects in children. Its coveted AMPLATZER occlusion (closure)
devices are currently sold in 112 countries.

AGA Medical has the leading sh
are of the market for structural heart defect occluders. The company has a
robust pipeline with a number of products currently under clinical trials. Should they be successful, St. Jude
can look forward to blockbuster opportunities.

Consolidation binge amo
ng the top
-
tier U.S. medical devices companies continues as they battle to grab
share in the mature pacemaker and implantable cardioverter defibrillator (ICD) markets. St. Jude, like its
peers
Medtronic

(
MD
T
) and
Boston

Scientific

(
BSX
), is exploring new avenues of growth by targeting
smaller companies with promising growth prospects.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

17

The acquisition provides St. Jude with the opportunity to expand into fas
t
-
growing new therapy areas beyond
its legacy ICD and pacemaker markets. The addition of AGA Medical is expected to considerably strengthen
St. Jude’s atrial fibrillation and cardiovascular franchises.

The integration of the complementary product lines wil
l make the combined entity a leading player in the
structural heart market. AGA Medical has historically grown at a healthy pace with revenues increasing at a
compound annual rate of 19% over the last five years.

St. Jude expects the acquisition to help it
s sales grow at a low double
-
digit rate in 2011. Moreover, the deal is
expected to be accretive to earnings starting 2011. St. Jude expects AGA Medical to contribute $20 million to
$25 million in revenue in fourth
-
quarter 2010. We are currently Neutral on
St. Jude, which is supported by a
short
-
term Zacks #3 Rank (Hold).

Bull

of

the

Day

Scripps Networks Interactive (SNI)

By: Zacks Equity Research

November 19, 2010
|
Comments
: 0

Recommended this article (0)

SNI


We upgrade our recommendation for
Scripps Networks Interactive

(
SNI

-

Analyst

Report
) to Outperform
following its impressive third quarter of fiscal 2010 financial results, w
ell above the Zacks Consensus
Estimates. This was primarily attributable to significant growth in advertising and affiliate
-
fee revenue at the
company's flagship Lifestyle Media business and higher total segment profit.

Importantly, the struggling online
shopping business sites of the company also generated year
-
over
-
year
growth. According to our view, both advertising revenue and affiliate fee revenue will remain healthy in the
near
-
future due to an improving U.S. economy. Scripps Networks has successfull
y hiked fees it charges cable
operators.

Acquisition of a majority stake in the Travel Channel and re
-
branding of FLN channel as Cooking Channel will
help the company to maintain its future growth. Moreover, Scripps Networks is gradually diversifying in t
he
emerging Asian markets.

Bear

of

the

Day


Red Robin Gourmet Burgers (RRGB)

By: Zacks Equity Research

November 19, 2010 |
Commen
ts
: 0

Recommended this article (0)

RRGB


Red Robin Gourmet Burgers

(
RRGB

-

Analyst

Report
) reported third quarter 2010 earnings below the
Zacks Consensus Estimate, as it experienced a rise in cost, negatively impacting margins. The company
expects n
egative same
-
store sales and cost inflation in the fourth quarter of 2010.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

18

We thus remain apprehensive regarding the stock in the near term, given eroding margins and lagging same
-
store sales due to decline in traffic. Additionally, the company suspended
its outlook for fiscal 2010 and
provided a little insight for 2011, thus projecting low visibility on the stock.

Moreover, the stiff competition to lure budget constrained consumers, and the presence of nearly 50% of the
restaurants in areas hit hard by t
he recent housing downturn, are causes of concern. They may dampen the
company's growth potential. As a result, we are downgrading the stock from Neutral to Underperform

Aggressive

Growth

Park
-
Ohio Holdings


By: Bill Wilton

November 19, 2010 |
Comments
: 0

Recommended this article (0)

PKOH


Park
-
Ohio Hold
ings

(
PKOH
) reported earnings about 3 times higher than expected, which instantly pushed expectations
higher.

Even though shares have moved higher, the valuations are great and this Zacks #1 Rank (Str
ong Buy) is poised for
another run.

Company Description


Park
-
Ohio Holdings provides supply management services and manufacturing for engineered products. The company has
29 manufacturing and 52 logistic facilities.

Crushed Expectations


On Nov 8 Park
-
Oh
io reported quarterly sales of $203 million, up 20% since the same period in 2009. Net income came in
at $6.2 million, which is a strong turnaround from the $3.2 million loss a year go.

The covering analyst was not just surprised, they were shocked. The c
ompany earned 60 cents per share, more than 3
times the 19 cents the estimate was calling for. This was Park
-
Ohio's fourth consecutive earnings surprise.

Bullish Comments


Park
-
Ohio's Chairman and CEO commented that the company has been very busy in the p
ast quarter booking new
orders, which is now up about 50% year
-
to
-
date.

Also, the acquisition of Assembly Component System, which took place during the quarter, will add over $50 million in
revenue next year.

Estimates Soar




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

19

Currently, expectations for t
his year's earnings are $1.10, up 19 cents since the quarterly news. Next year's forecast is
calling for $1.54, up 29 cents.

The growth rate for this year is off the chart, coming up from a 7
-
cent loss in 2009. The projection for 2011 is for 40%
growth.

Valuations


Right now shares of PKOH are going for about 12 times next year's earnings estimates. The price to sales is coming in at
0.27 times, showing solid value.

The Chart


Shares of PKOH were up nicely on the earnings surprise, but hit a wall when th
e stochastic hit "overbought" territory.
However, the stock has taken a breather and could be poised for another move higher.


Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market
-
beating
Zacks

Small

Cap

Trader

service





Momentum

Ctrip.com International, Lt
d.




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

20

By: Michael Vodicka

November 19, 2010 |
Comments
: 0

Recommended this article (1)

CTRP


Ctrip.com International, Ltd.

(
CTRP

-

Snapshot

Report
) recently hit a new multi
-
year high above $53 after
the company reported an awesom
e Q3 earnings surprise of 29% in early November. With a bullish next
-
year
estimate and high industry rank, this Zacks #1 rank stock provides international flavor to the momentum
faction.

Company Description


Ctrip.com Int. Ltd., together with its subsidia
ries, provides a range of travel services from hotels to airline
tickets in China. The company was founded in 1999 and has a market cap of $6.66 billion.

China has been a leader in the global economic rebound of the last 18 months, showing huge gains in G
DP
that continue to enrich its middle class. That dynamic was on display on Nov 4 when the company reported
strong Q3 results that came in ahead of expectations.

Third
-
Quarter Results


Revenue for the period was up 48% from last year to $129 million. Earn
ings also came in strong at 31 cents,
29% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 15%
over the last four quarters.

The strong results were driven by hotel rentals, where sales were up 36% from last year

to $52 million on a
30% increase in volume. Air tickets were also strong, also up 36% from last year to $47 million.

Not only did Ctrip see big sales gains, its gross margin reveals a highly profitable business, coming in 78%,
up 100Bps from last year.

Tons of Cash, No Debt


Ctrip emerged from the quarter with its pristine balance sheet in great shape, with its cash and equivalents up
$93 million from last year to $275 million.

Estimates


We saw some pretty solid movement in estimates on the good quarte
r, with the current year up 7 cents to
$1.01 and the next
-
year estimate up 6 cents to $1.29, a bullish 28% growth projection.

Valuation


In light of recent gains, CTRP's forward P/E of 50X is a sharp premium to the industry average of 16X.

2
-
Year Chart




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

21

On the chart, CTRP recently hit a new multi
-
year high above $53 before pulling back a bit on general market
volatility. But in spite of the gains, the stochastic below the chart is signaling that shares are trading near over
-
sold territory. Look for suppor
t from the long
-
term trend line on any weakness.



Growth

&

Income

The Kroger Co

By: Todd Bunton

November 19, 2010 |
Comments
:

0

Recommended this article (1)

KR


If there is one industry that can survive a recession, it's grocery stores. People may cut back a bit or trade
down to generic brands, but they stil
l have to eat.
The Kroger Co

(
KR

-

Analyst

Report
) is one of the largest
sup
ermarket chains in the U.S., and the company weathered the last recession quite well.

Kroger recently reported solid results for the second quarter of 2010, marked by strong same
-
store sales.
Management expects this trend to continue for the rest of 2010,

too, which has prompted analysts to raise
their estimates higher.

Second Quarter Results


Kroger recently reported its results for the second quarter of 2010. Earnings per share came in at $0.41, a 5%
increase over the same quarter in 2009, and 14% ahead

of the Zacks Consensus Estimate. It was Kroger's
third consecutive earnings surprise.

Total sales increased 6.0% over the same quarter in 2009. Excluding volatile fuel revenue, same
-
store sales
were up 2.7%.

Meanwhile, operating profit declined 1.0% ove
r the same period in 2009.

Outlook




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

22

Management gave guidance following its third quarter earnings release. For 2010, the company expects to
earn between $1.60 and $1.80 per share on same
-
store sales growth of 2.0%
-
3.0%.

The Zacks Consensus Estimate for 2
010 is within guidance at $1.77, corresponding to a 3% increase over
2009 EPS. The 2011 estimate is currently $1.97, equating to 11% EPS growth. It is a Zacks #2 Rank (Buy)
stock.

Dividend


Kroger has increased its dividend at a compound annual growth rat
e of 13% since 2006. It yields 1.8%.

The company has a payout ratio of 23%, which is in
-
line with most of its peers. For instance,
Supervalu

(
SVU

-

Analyst

Report
) pays out roughly 19% of its earnings in dividends, while
Safeway

(
SWY

-

Analyst

Report
)
pays out 32%. Southeast supermarket operator
Ruddick Corp

(
RDK

-

Snapshot

Report
) has a payout ratio
of 21%.

Fundamentals


Kroger is relatively cheap, trading at just 12.9x forward earnings, compared to the industry average of 16.6x.

Its price to sales ratio is just 0.2, well below its peers at 0.5.

The stock has been essentially flat over the last 12 months.


Kroger was founded in 1883 and is headquartered in Cincinnati, Ohio. It has a market cap of $14.5 billion.

Todd Bunton is
the Growth & Income Stock Strategist for Zacks.com.



Value

Dorman Products Inc.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

23


By: Tracey Ryniec

November 19, 2010 |
Comments
: 0

Re
commended this article (1)

DORM


The automotive industry has come roaring back to life.
Dorman Products, Inc.

(
DORM

-

Snapshot

Report
),
which provides auto replacement parts, saw revenue jump 22% in the third quarter. The stock has attractive
valuations, trading
at 14.5x forward estimates.

Dorman has been around almost since the birth of the automobile, when in 1918, the founders realized that
there was a real business for hard to find auto replacement parts.

The company used to actually find the parts in the junk

yard but now distributes thousands of products under
numerous brand names such as Dorman, AutoGrade, First Stop, Conduct
-
Tite and Scan
-
Tech.

7th Earnings Surprise in a Row

On Oct 26, Dorman Products reported its third quarter results which blew by the Zac
ks Consensus Estimate
by 27%. Earnings per share were 71 cents compared to the consensus of 56 cents. This is 61% better than a
year ago, which was 44 cents.

It continued an incredible streak of 7 earnings surprises in a row which began in early 2009 as th
e economy
was slowing coming out of the recession.


Revenue soared to $119.2 million from $98 million in the third quarter last year on strong customer demand
and higher new product sales. For the first 9 months, revenue climbed 18.7%.

Outlook Looks Good
for 2011



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

24

The company is optimistic about 2011 as it plans on having the largest number of new product releases in its
history for both its new and existing product lines.

It has also begun an expansion of its Warsaw, Kentucky distribution facility to suppo
rt its future growth.

The addition will be about 175,000 square feet of warehouse space at the cost of $9 million. It should be
completed by the spring of 2011.

Zacks Consensus Estimates Head Up

Even though the company did not provide earnings per share g
uidance, given the big beats the last few
quarters, it's not surprising that the analysts are raising estimates.

The 2010 Zacks Consensus is up 14 cents to $2.36 in the last month. Analysts expect earnings growth of
60.2% compared to 2009.

The 2011 Zacks C
onsensus has also been on the move higher. It has jumped to $2.61 from $2.33 in the last
30 days. This is still double digit earnings growth of 10.6%.

Valuations Still Look Good

In addition to an attractive P/E ratio, the company also has a price
-
to
-
book r
atio of 2.4, which is within the
parameters of a value stock.

The company also has an outstanding 1
-
year return on equity (ROE) of 18%, well above its peers at 11.7%.

Dorman Products is a Zacks #1 Rank (strong buy) stock.

Tracey Ryniec is the Value Stock S
trategist for Zacks.com. She is also the Editor in charge of the market
-
beating
Zacks

Value

Trader

service
. You can follow her at
twitter.com/traceyryniec

Investment

Ideas

4 Stocks with Leverage

By: Todd Bunton

November 18, 2010 |
Comments
: 0

Recommended this article (2)

ETN

|
HMC

|
CSX

|
CAT


Think about the last time you stayed in a hotel. How much did you pay? How much did it actually cost the
hotel to have you stay there that night?

Sur
e, it cost a lot of money to build and furnish the room, but the company has already incurred those
expenses. The actual incremental costs are low. You might use some additional water and electricity
-

and
they'll have to pay someone to clean up your mess
afterward
-

but unless you're Charlie Sheen that shouldn't
take much.

In other words, your stay there is almost pure profit for the hotel company. The reason:
operating leverage
.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

25

A Small Change Can Make a Big Difference


Companies with high operating lev
erage tend to be capital
-
intensive businesses with a lot of fixed assets, or
overhead. Fixed expenses like property, plant, and equipment generally won't fluctuate with sales volume.
Thus, a modest increase in sales can mean huge growth in profits, as each

additional dollar of revenue falls
almost straight to the bottom line.

Take XYZ Corp for example. The company sells widgets that require expensive machinery inside of
expensive plants to manufacture. Their variable costs are relatively low. In Year 1, th
e company makes $2
million in sales and has $200,000 in net income. In Year 2, demand picks up a bit and there is a modest 5%
increase in sales. Operating income, however, grows by a whopping 40%.


In contrast, companies with variable cost structures wil
l have low operating leverage. These tend to be labor
-
intensive businesses or retailers that can adjust the bulk of their expenses as demand changes. These
businesses can weather economic downturns easier by cutting staff or reducing inventory, but when th
ings
turn around they will have less upside potential.

High Volatility


The profits of high
-
leverage companies tend to be amplified as demand fluctuates with the business cycle.
Hence, their share price will be highly volatile. These companies will experi
ence low or negative profits and a
falling share price when times are bad (like in 2008
-
early 2009), but explosive profit growth and rapidly rising
share prices when things turn around (late 2009
-
???).

As the global economic recovery gains traction, these

high
-
leverage businesses are expected to see
excellent profit growth.


Eaton Corp

(
ETN

-

Analyst

Report
) is your typical cyclical stock. The company is an industrial conglomerate
operating in capital
-
intensive areas like electrical components, hydraulics, aerospace, and
trucking/automotive.

In 2009, when the global economy wa
s suffering, the company saw a 23% drop in sales. Due to its high
leverage, operating income plunged 65%. Things have been turning around for Eaton, however. For the third
quarter of 2010, the company saw a healthy 18% increase in sales over the same quart
er in 2009 and an
impressive 70% increase in operating income.

Analysts have been raising estimates following the strong quarter, sending the stock to a Zacks #1 Rank
(Strong Buy). The Zacks Consensus Estimate is calling for 115% EPS growth in 2010 and 26
% growth in
2011.

The stock tends to fluctuate with the business cycle, as seen in its 5
-
year chart:



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

26


The stock is up over 50% year
-
to
-
date, but valuation looks attractive. Shares trade at 16.6x forward earnings,
a discount to the industry average of 18
.3x. Its price to book ratio of 2.2 is in
-
line with its peers. The stock also
offers a 2.5% dividend yield.

Honda Motor

(
HMC

-

Analyst

Report
) is another company with high operating leverage. The Japanese
company is famous for its automobiles, but also manufactures motorcycles, ATVs, generators, and lawn
mowers, among other th
ings.

In fiscal year 2009, sales were down 17% while operating income fell 80%. For the second quarter of 2011,
sales were up 9% while operating income grew an incredible 149%.

Analysts have revised their estimates much higher for 2011, sending the stock

to a Zacks #2 Rank (Buy). The
Zacks Consensus Estimate for 2011 calls for 311% EPS growth over 2010.

Shares for Honda have been slightly less volatile over the last 5 years:


The stock is up about 10% year
-
to
-
date, and valuation looks very attractive.
Shares trade at 11.1x forward
earnings, a discount to the industry average of 16.4x. Its PEG ratio is a mere 0.3.

CSX Corp

(
CSX

-

Analyst

Report
) also carries a lot of fixed assets and has relatively low variable costs. The
southeastern railroad company serves as a bellwether to the overall economy.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

27

The company was relatively

successful in managing its costs during the downturn in 2009, but shares still
plunged over 65% from May 2008 to their nadir in March 2009. In the third quarter of 2010, CSX reported a
16% increase in revenue and a stellar 39% increase in operating income
.

Analysts have also been raising their earnings estimates significantly higher for CSX. The Zacks Consensus
Estimate is calling for 40% EPS growth in 2010 and 17% growth in 2011. It is a Zacks #1 Rank (Strong Buy)
stock.

Shares of CSX are near their pre
-
recession levels:


The stock is up over 20% year
-
to
-
date, but valuation is quite reasonable. The stock trades at 15.0x forward
earnings, well below the peer group multiple of 19.5x. It has a PEG ratio of 1.3. The stock offers a dividend
yield of 1.7%.

Caterpillar

(
CAT

-

Analyst

Report
) is another company that will tend to s
truggle during economic contraction
and thrive during recovery and expansion. The company makes large earth
-
moving equipment and recently
announced it will be acquiring mining equipment maker Bucryus for $8.6 billion.

In 2009, CAT saw a 37% decrease in re
venue and an 88% drop in operating income. Things have begun to
turn around though. For the third quarter of 2010, CAT saw a 53% increase in sales and a 329% jump in
operating profit.

Analysts have been raising their estimates significantly higher off the

strong quarter. The Zacks Consensus
Estimate is calling for 83% EPS growth in 2010 and 44% growth in 2011. It is a Zacks #1 Rank (Strong Buy)
stock.

Caterpillar's stock has also moved in tandem with the business cycle:




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

28

It has risen more than 40% so fa
r this year, but valuation is still reasonable. Shares trade at 20.4x times
forward earnings, a slight premium to the industry average of 18.3x. Its PEG ratio is 1.5. CAT has a dividend
yield of 2.2%.

Proceed with Caution


Keep in mind that if the economi
c recovery stalls and we slip back into another recession, these companies
will be left with high expenses and little demand for their products. That will spell trouble for their share price.

In other words, leverage is a two
-
edged sword.

Todd Bunton is
the Growth & Income Stock Strategist for Zacks.com.


Zacks

#1

Rank

Top

Performers

Wesco International (WCC)


By: James Giaquinto

November 17, 2010
|
Comments
: 0

Recommended this article (0)

WCC


When
Wesco International Inc.

(
WCC

-

Analyst

Report
) announced its third
-
quarter report in late October,
the company was a Zacks #3 Rank ('hold'). But since then, not only ha
s WCC moved to a Zacks #1 Rank
('strong buy'), but it also ended Wednesday's ho
-
hum session as one of the top performers.

But it wasn't the strong third
-
quarter performance that sparked today's share price gain. Instead, it was the
announcement that WCC w
ould be acquiring TVC Communications.

Shares advanced by approximately 5.8% today, while the Dow lost more than 15 points and the S&P could
only manage a quarter
-
point gain. Volume eclipsed 1 million shares, compared to the daily average of a little
more
than 842,000.

In addition to its enviable Zacks Rank, we also have a longer
-
term "Outperform" recommendation for WCC.
There are several positive factors that we like about the company, including its strong market position, the
turnaround in the industrial

and utility markets and its global account model. And let's not forget that its
earnings estimates are moving in the right direction.

Wesco International, whose primary operating entity is Wesco Distribution, is a leading distributor of electrical
constr
uction products and electrical and industrial maintenance, repair and operating (MRO) supplies, and is
the nation’s largest provider of integrated supply services. Major markets include commercial and industrial
firms, contractors, government agencies, edu
cational institutions, telecommunications businesses and
utilities.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

29

WCC is the only company from the electrical parts dist industry on today's
Zacks

#1

Rank

List
.

Buying TVC Communications

The

value of the deal is approximately $246.5 million. TVC Communications is a leading distributor of
broadband communications infrastructure products serving the cable, telecommunications and satellite
industries.

According to Wesco, TVC strengthens its dat
a communications platform while also expanding into previously
untapped international growth markets. The acquisition is expected to be immediately accretive, and should
boost Wesco's 2011 diluted earnings per share by approximately $0.30 or more.

The dea
l should close before the end of the year.

Earnings Estimates for Wesco International

While the acquisition helped WCC become a top performer on Wednesday, it is not the reason why the
company has the best Zacks Rank possible. The catalyst of that stems f
rom a strong third quarter report in
late October.

Earnings per share came in at 74 cents in the quarter, which surpassed the year
-
ago result of 63 cents,
excluding items. The result also beat the Zacks Consensus Estimate of 65 cents by nearly 14%. This m
arked
the fourth straight quarter with a positive earnings surprise.


Consolidated net sales benefited from solid momentum across the business, gaining practically 15% year
over year to $1.325 billion from $1.152 billion.

For more on the quarter, read:
WESCO

Beats,

Prospects

Improving
.

In the wake of this strong quarterly report, all 17 estimates for this year were revised higher. The Zacks
Consensus Estimate of $2.49 per share is up 6.9% in the past
30 days from $2.33.

Meanwhile, analysts expect next year’s profit of $3.18 per share to grow by nearly 28% from this year. The
Zacks Consensus Estimate is up 4.6% in 30 days on 17 upward revisions out of 19 total estimates.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

30



Economic Highlights

Update
on 25
-
10
-

2010






Sector Data Rank
as
of

28
-
7
-
2010

Sector

"This Week's
Zacks Rank
"

"Week ago
Zacks Rank
"

"FY10
Revisions
Ratio "

"FY10
Estimates
Revised Up "

"FY10 Estimates
Revised Down "

"FY11
Revision
s
Ratio "

Auto
-
Tires
-
Trucks

2.59

2.73

2.12

70

33

2.52

Transportation

2.72

2.72

2.05

352

172

1.94

Computer and
Technology

2.86

2.89

1.99

843

424

1.81

Basic Materials

2.9

2.93

0.95

196

207

1.15

Aerospace

2.9

2.95

0.79

38


48

0.76

Industrial Products

2.94

2.94

2.09

232

111

1.86

Consumer
Discretionary

2.98

2.98

1.63

312

191

1.25

Business Services

3.01

3

0.89

134

150

0.79

Utilities

3.02

3.07

1.48

155

105

0.92



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

November
-
19
-

2010

31

Consumer Staples

3.03

3.06

1
.65

167

101

1.76

Medical

3.04

3.03

0.91

404

442

0.73

Retail
-
Wholesale

3.06

3

0.89

292

327

0.77

Construction

3.07

3.01

0.54

63

116

0.41

Oils
-
Energy

3.09

3.08

0.7

482

690

0.71

Finance

3.11

3.07

0.8

932

1159

0.56

C
onglomerates

3.13

3.04

3.93

55

14

1.27