Zacks.com announces the list of top performing Zacks #1 Rank (Strong Buy) stocks for the month of February. The stocks on the prestigious list with the highest returns last month were Compass Minerals (NYSE: CMP), Walter Industries, Inc. (NYSE: WLT), Netflix, Inc. (NASDAQ: NFLX), The Mosaic Company (NYSE: MOS) and Apache Corporation (NYSE: APA). Each of these stocks easily outperformed the S&P 500.
Stocks ranked #1 (Strong Buy) by Zacks have produced an average annual return of +32% 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.
Compass Minerals (NYSE: CMP) announced a robust fourth-quarter performance on Feb 11, helping the company gain 34% for February. Earnings reached $1.31 per share, excluding items, on sales of $326.1 million. The EPS result marked a positive surprise of more than 23% atop the consensus and a significant year-over-year improvement. Sales rose 54% from $211.1 million.
Earnings estimates for this year are up 18% over the past month. CMP is optimistic about 2008, especially given the strong global demand for sulfate of potash. Furthermore, the company believes its salt segment will benefit from stronger pricing, new products and increased rock salt capacity.
Walter Industries, Inc. (NYSE: WLT) was a top-performing Zacks #1 Rank stock for February with a gain of 31%. On Feb 19, WLT announced a fourth-quarter EPS surprise of 12.5%. Excluding a claim, revenues advanced 5.1% organically and 9.7% in total. Earnings estimates for this year have been trending higher with a rise of 14% in the past two months, including an improvement of 9.6% in the past 30 days.
WLT is confident that it can continue delivering significant value to shareholders in 2008 and beyond, given its expanding production volumes and its ability to capitalize on favorable market conditions.
Netflix, Inc. (NASDAQ: NFLX) advanced 26% during February. Earnings estimates for this year have soared approximately 41% over the past two months.
Last week, the company raised its first-quarter and full-year guidance, now expecting between 15 cents and 22 cents for the quarter on revenue of $324 million to $328 million. NFLX also raised its EPS, revenue and subscriber outlooks for the full year. This news came about a month after NFLX announced impressive results for its fourth quarter.
The Mosaic Company (NYSE: MOS) enjoyed a rise in earnings estimates for the year ending May 2008 of approximately 4.8% in the past two months. Expectations for next year are also up in that timeframe. MOS will report its fiscal third quarter results in early April. The company gained 22% last month.
In January, MOS announced a solid fiscal second-quarter report, including earnings per share that topped the consensus by almost 11% while improving year-over-year by more than 400%. This marked the third straight quarter that EPS eclipsed expectations. Net sales moved higher by 44% to $2.2 billion. Highlights during the quarter included a 61% year-over-year jump for the company’s Phosphates segment, and a 23% improvement for the Potash segment.
Apache Corporation (NYSE: APA) reached the top performers list for February with a gain of 20%. Early last month, APA announced fourth-quarter adjusted earnings per share of $2.92, which marked a positive surprise of almost 17.3% and also a substantial year-over-year improvement. Revenue came close to $3 billion.
Earnings estimates for this year are up 5.8% over the past two months, including a rise of 1.2% in the past 30 trading days. The company said it built “tremendous” momentum for 2008.
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 +32%. 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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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.