Zacks/Schaeffer's Options Trader Highlights: Hexcel, Garmin, and USG.CHICAGO -- Zacks.com highlights three stocks identified by Zacks/Schaeffer's Options Trader: Hexcel (NYSE NYSE See: New York Stock Exchange :HXL), Garmin Limited (Nasdaq:GRMN), and USG Corporation USG Corporation (NYSE: USG), also known as United States Gypsum Corporation, is a Fortune 500 (rank 396 in 2007)[1] company that manufactures construction materials. USG Corporation was organized on January 1 1985 as the holding company of its subsidiaries. (NYSE:USG (UNIX Systems Group) The division within Novell that was responsible for UnixWare. See USL. ). Zacks has partnered with the leading options experts, Schaeffer's Investment Research, to provide you the best options commentary, research, and trading tools on the market today. Learn more about the Zacks/Schaeffer's Options Trader at http://at.zacks.com/?id=2813. Back on April 17, we looked at one of our newest services - the Zacks/Schaeffer's Options Trader. In that observation, we picked three stocks that looked like nice longs according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Zacks #1 Rank stocks and Schaeffer's contrarian methodology. Today we want to take a look at how these positions have done the past five weeks. First, here's a refresher on Zacks Investment Research Zacks Investment Research A firm that compiles earnings estimates and brokerage firm investment recommendations for thousands of publicly traded firms. . They are the source when it comes to earnings estimates. The Zacks Rank compiles, sorts, and filters, research from more than 3,000 sell-side analysts Sell-side analyst A financial analyst who works for a brokerage firm and whose recommendations are passed on to the brokerage firm's customers. Also called Wall Street analyst. . Their system analyzes approximately 4,400 stocks and ranks them according to their likelihood to rise or fall - daily. During the past 18 years, stocks with a Zacks #1 Rank have generated an average annual return of 33%. Here at Schaeffer's, we base our trading on Expectational Analysis(R). We are contrarian-based investors, meaning that we seek skepticism toward an outperformer as a sign that money is still on the sidelines On the sidelines An investor who decides not to invest due to market uncertainty. on the sidelines Of or relating to investors who, having assessed the market, have decided to avoid committing their funds. . Conversely, we want to see optimism toward an underperformer. We view too much optimism as a potential sign that nearly everyone who wants to invest in a particular stock has done so already. When you put the two methods together, you can have some pretty explosive returns. In April, we took the 212 stocks that had a Zacks #1 Rank and we added some filters to try and find the best plays according to our methodology. Here is exactly what we did to filter the list down. To start, we want to see stocks that are in the top 85% of their yearly range. This way we know that we've got a technically strong technically strong Used to describe a security or the whole market when most technical indicators point toward a price rise. For example, a stock may be technically strong because it has twice attempted and failed to break through a support level. security. Then we want stocks with a Schaeffer's Equity Scorecard above 5.0 out of 10.0 - again weeding out weak performers. Finally, we like to see stocks that have a lot of shorts betting against the shares. Short selling Short Selling The selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold short. is a stock-trading strategy that basically involves selling a stock with the intention of buying it back later at a lower cost. In other words Adv. 1. in other words - otherwise stated; "in other words, we are broke" put differently , you are betting that the shares will go down. For a bullish Bullish Word used to describe an investor's attitude. Bullish refers to an optimistic outlook, while bearish means a pessimistic outlook. bullish play, we love to see a lot of shorts, since it increases the odds of a short-covering rally on any good news. To do this, we filtered for stocks that have greater than 7% of their float sold short. This way we're left with names that have a lot of shorts betting against them. And after all of our filtering, we're left with a much more manageable list of 21 names. Next we simply go to the charts and see if anything looks good. After this, we're left with three names. What were the three you ask? Aircraft component maker Hexcel (NYSE:HXL), wireless leader Garmin Limited (Nasdaq:GRMN), and wallboard maker USG Corporation (NYSE:USG). So what has happened over the past five weeks? Looks like we've got one slight loser, one slight winner, and one solid return - remember when it comes to trading options we stress cutting your losers and riding your winners, meaning this type of combination can make you a lot of money. As of Thursday afternoon USG was down about 2% over this time, HXL was up about 3%, and GRMN soared over 15%. All in all, not too bad! Plus HXL and GRMN both made new highs on Thursday, so it's safe to say the path of least resistance Noun 1. path of least resistance - the easiest way; "In marrying him she simply took the path of least resistance" line of least resistance fashion - characteristic or habitual practice is higher until proved otherwise. In conclusion, we're convinced that combining both Zacks and Schaeffer's knowledge in the field of investing can yield some very nice longer-term results. If you are interested in finding out more about Zacks/Schaeffer's Options Trader which combine the best of Zacks Ranking System and the Power of Schaeffer's Expectational Analysis call 1-800-510-0462 and SAVE $500 OFF the retail price of $1,495 by mentioning this article. Or learn more online at http://at.zacks.com/?id=2814 Please continue to use all of the filters on the Zacks options research pages for your money-making ideas, and don't be afraid to make a few paper trades to see what strategy works best for you. But please remember that when it comes to options, the majority of your trades are going to be losers. Don't get discouraged, because that's the beauty of the leverage that options provide. It takes only a few winners out of every 10 trades to make you a very happy investor. And remember the Zacks/Schaeffer's Options Trader could be your ticket to winning options trades with little to no work through the best information from two power-houses in the industry! Good luck! Discover all the tools and commentary available from the Zacks.com Options Center at http://at.zacks.com/?id=2815 Zacks Rank + Options = Trading Success! Leverage the timeliness of Zacks #1 Rank stocks with options trades that maximize profits and minimize risks. Learn more about our new Options Trading service at http://at.zacks.com/?id=2816 About the Zacks Rank For over 17 years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time 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 +33%. 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 129.7% annually (+5.2% vs. +11.9%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively. Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of Zacks #1 Rank stocks and highlights those stocks poised to outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. the market. Subscribe to Verb 1. subscribe to - receive or obtain regularly; "We take the Times every day" subscribe, take buy, purchase - obtain by purchase; acquire by means of a financial transaction; "The family purchased a new car"; "The conglomerate acquired a new company"; this free newsletter today by visiting http://at.zacks.com/?id=2817 The Zacks Rank, and all of its recommendations, is created by Zacks & Co., member NASD NASD See: National Association of Securities Dealers NASD See National Association of Securities Dealers (NASD). . Zacks.com displays the Zacks Rank with permission from Zacks & Co. on its web site for individual investors. 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 at http://at.zacks.com/?id=2817 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. (a) 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 Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. of all dividends, no transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). , 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 solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual to buy or sell any security. |
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