Zacks.com announces the latest list of top performing Zacks #1 Rank (“strong buy”) stocks. The stocks on the prestigious list with the highest returns last week were LaBranche & Co. Inc. (NYSE: LAB), Multi-Fineline Electronix, Inc. (NASDAQ: MFLX), American Public Education, Inc. (NASDAQ: APEI), Cyberonics, Inc. (NASDAQ: CYBX) and NetScout Systems, Inc. (NASDAQ: NTCT), Each of these stocks easily outperformed the S&P 500.
Stocks ranked #1 (Strong Buy) by Zacks have produced an average annual return of +28% 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%. To learn more about the Zacks Rank, go to http://at.zacks.com/?id=3172.
Here is a synopsis of the last week’s best performing Zacks #1 Rank stocks.
LaBranche & Co. Inc. (NYSE: LAB) was one of the top-performing Zacks #1 Rank stocks last week as shares gained approximately 19.2%. The company’s strong performance was helped by an upgrade from a major brokerage firm. LAB is scheduled to report its fourth-quarter results on Jan 21. In the third quarter, pro forma earnings per share reached 22 cents, which matched the consensus and improved handily from a loss of 7 cents in the prior year.
Earnings estimates have been on the rise over the past 7 days for LAB. Expectations for the year ended December 2008 are up 3.8%, while expectations for the year ending December 2009 advanced 23.8%. Furthermore, estimates are up 20% and 36.8%, respectively, from 3 months ago.
Not only was Multi-Fineline Electronix, Inc. (NASDAQ: MFLX) a top-performing Zacks #1 Rank company for the week ended Jan 16, but the circuit board maker is also a recent addition to the Focus List. Shares gained 8.7% last week, and earnings estimates for the year ending September 2009 are up 30.2% in the past month. Expectations for next fiscal year are also up in that timeframe.
Earlier this month, MFLX raised its fiscal first quarter sales outlook and now expects approximately $215 million with a gross margin percentage of 14% to 16%. The company also announced a share repurchase program. MFLX stated that its current business outlook indicates that strong customer demand is continuing into the fiscal second quarter. Fiscal first quarter results will be announced in early February. In its fiscal fourth quarter, the company reported earnings per share that beat the consensus by almost 79% while easily surpassing the year-ago result.
American Public Education, Inc. (NASDAQ: APEI) made the Zacks #1 Rank Top Performers List for last week as shares advanced 8.2%. APEI is part of an industry that actually prospers during difficult economic times when unemployment is on the rise. In its third-quarter report from November, the company announced that net course registrations from new students jumped 55% year over year. Earnings per share in the quarter reached 20 cents, which beat the consensus by more than 17% while surpassing the year-ago result. Total revenues were up 56%. The company’s fourth-quarter report will be announced in March.
Earnings estimates for the year ended December 2008 are up over the past 3 months. Expectations for the year ending December 2009 improved 2.6% over the past 2 months, including a gain of almost 1% in the past 30 days. Analysts currently expect profit growth of almost 44% in 2009 over 2008, which is an encouraging sign moving forward. APEI is an online provider of higher education, focused primarily on serving the military and public service communities.
Earnings estimates for Cyberonics, Inc. (NASDAQ: CYBX) remain at heightened levels with expectations for the year ending April 2009 up 47% in 2 months and 6.8% in 30 days. Meanwhile, estimates for the year ending April 2010 advanced more than 22% in 2 months. Analysts currently expect profit growth of more than 40% for next fiscal year over this fiscal year. Shares of this medical technology company gained 7% last week, which was enough to make it a top-performing Zacks #1 Rank company.
CYBX announced a strong fiscal second-quarter performance in November. Earnings per share of 14 cents beat the consensus by more than 133% while also reversing a year-ago loss. The result marked another quarter of better-than-expected results as CYBX has amassed an average EPS surprise of more than 160% in 4 quarters. Net sales advanced 24% to $36 million. The company stated that its core U.S. epilepsy business showed excellent growth with revenues increasing about 32%.
NetScout Systems, Inc. (NASDAQ: NTCT) is scheduled to report its fiscal-third quarter results on Jan 22. The company, which recently provided encouraging preliminary results for the quarter, was featured in this week’s Earnings Preview at Zacks.com as a company that could issue a positive earnings surprise. With shares that gained 5.6% for the week ended Jan 16, NTCT made the Zacks #1 Rank Top Performers List.
NTCT raised its guidance for fiscal year 2009 on Jan 6, sending earnings estimates higher. Expectations for the years ending March 2009 and March 2010 increased 20% and 12.3%, respectively, over the past month. The company has an excellent record of meeting or beating Wall Street’s quarterly earnings expectations, and has put together an average surprise of approximately 146% over the past 4 quarters. In its fiscal second quarter, the EPS surprise came in at more than 23%. NTCT calls itself “an industry pacesetter for advanced network and service assurance solutions for over a decade”.
About the Zacks Rank
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 +28%. 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 80% annually (+2 % vs. +10%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
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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.