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 Foster Wheeler Ltd. (NASDAQ: FWLT), CryoLife, Inc. (NYSE: CRY), DryShips Inc. (NASDAQ: DRYS), Sun Hydraulics Corporation (NASDAQ: SNHY) and AK Steel (NYSE: AKS). Each of these stocks easily outperformed the S&P 500.
Stocks ranked #1 (Strong Buy) by Zacks have produced an average annual return of +31.9% 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.
Foster Wheeler Ltd. (NASDAQ: FWLT) recently reported its fourth straight record-breaking earnings quarter, helping the oil & gas engineering and construction firm become the top-performing Zacks #1 Rank company last week. Shares jumped 36% for the week ended May 11, and reached 52-week highs each day from May 7 through May 9. FWLT announced earnings per share of $1.60 that easily surpassed the consensus by 113.3%, while also trouncing the year-ago performance. Revenue improved to $1.15 billion from $645.8 million. According to the company, both its Global Engineering & Construction Group and Global Power Group delivered performance breakthroughs in the quarter.
Foster Wheeler stated that fundamentals for the markets it serves remain robust, and it plans to continue increasing the capacity of its two business groups to capture those opportunities. In just the past seven days, analysts have boosted earnings estimates for this year by 26% to $4.23. Meanwhile, expectations for the second quarter are up 23% to $1 in the same timeframe. Earnings estimates for next year also moved higher in the past week.
CryoLife, Inc. (NYSE: CRY) returned to profitability in its first quarter as earnings per share of four cents reversed a year-earlier loss of eight cents. The result also eclipsed the consensus by approximately 33.3%. Revenues increased 26% to $24.5 million, versus $19.4 million in the first quarter 2006. One of the highlights in the quarter included a revenue rise of 14% for BioGlue® to $11.2 million. BioGlue is a surgical adhesive approved as an adjunct to sutures and staples for use in adult patients in open surgical repair of large vessels. The company attributed the quarter’s results to the successful strategic review by its Board and management last year.
CryoLife is a leader in the processing and distribution of implantable living human tissues for use in cardiac and vascular surgeries. It was one of the top-performing Zacks #1 Rank companies last week as shares advanced more than 20%. It also reached 52-week highs on May 7 and May 8. Over the past 30 days, earnings estimates for this year moved higher by approximately 14%.
DryShips Inc. (NASDAQ: DRYS), an international provider of drybulk carriers, enjoyed a solid performance throughout April, and the momentum has continued into May. Last week, DryShips was once again a top-performing Zacks #1 Rank company as shares advanced 17.2%. It was also the top performer for the weeks ended Apr 20 and Apr 27, as well as for the entire month of April. The company made news when it announced a plan to purchase three bulk carriers while selling another as part of its fleet renewal and expansion strategy.
DryShips is being aided by favorable market conditions, thanks in part to strong demand for dry commodities. It reached 52-week highs on May 9, May 10 and May 11. Recently, the company announced seven-month period charters for two vessels. DRYS stated that its chartering strategy underpins its confidence in the positive fundamentals of the dry bulk industry and the upside potential of the spot market.
Sun Hydraulics Corporation (NASDAQ: SNHY) is a leading designer and manufacturer of high performance screw-in hydraulic cartridge values and manifolds for worldwide industrial and mobile markets. For its first quarter, the company reported earnings per share of 53 cents on sales of $40.9 million. EPS increased 39% year-over-year and bettered the consensus by approximately 20.5%. Sales moved forward 20% from $34.2 million. All of the company’s business segments grew in the quarter, but European and Asian sales were particularly strong.
Shares of Sun Hydraulics increased 15.2%, making it one of the top-performing Zacks #1 Rank companies. The stock also reached 52-week highs on each day from May 8 through May 10. The company believes it is continuing to gain market share, and expects second-quarter sales at about $41 million with earnings per share between 52 cents and 54 cents. That would mark year-over-year advances of approximately 11% and 36% respectively. Earnings estimates for this year and the second quarter moved higher in the past seven trading days.
Shares of AK Steel (NYSE: AKS) jumped on May 8 to a new 52-week high on speculation that the world’s top steelmaker, ArcelorMittal, was making moves to buy the company. Nothing has been confirmed and many brokerage analysts are skeptical, but AK Steel was one of the top-performing Zacks #1 Rank companies last week nonetheless with a gain of almost 15%.
Analysts were pulling up on AK Steel’s earnings estimates even before the report. Earnings estimates for this year are now at $2.63, which is up 35% over the past three months. That includes gains of 28.3% and 3.5% in the past one-month and seven-day periods respectively. For its first quarter, earnings per share of 56 cents bettered the consensus by 24.4% and surged year over year from six cents. Sales advanced to $1.72 billion, compared to $1.44 billion. The company said its momentum is spilling into the second quarter as it experiences positive effects of a strong market and new labor agreements along with cost and debt reduction initiatives.
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 +31.9%. 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 131.8% annually (+5.2% vs. +11.9%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
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(a)The Zacks Performance Rank performance is the total return of equal weighted simulated portfolios consisting of those stocks with the indicated Zacks Rank net of fees. Results reflect the reinvestment of dividends and other earnings. Simulated results do not represent actual trading and may not reflect the impact that economic and market factors might have had on decision-making if an adviser were actually managing a client's money.
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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.
