Contents. Introduction 2. Almost Family (AFAM) 3. Bank of the Ozarks, Inc. (OZRK) 4. Cracker Barrel (CBRL) 5. HCA Holdings (HCA) 6

Transcription

1 $99 VALUE

2 Contents Introduction 2 Almost Family (AFAM) 3 Bank of the Ozarks, Inc. (OZRK) 4 Cracker Barrel (CBRL) 5 HCA Holdings (HCA) 6 MicroStrategy (MSTR) 7 International Game Technology (IGT) 8 ServiceNow Inc. (NOW) 9 What to Do Next 10 1

3 Introduction The predictive ability of the Zacks #1 rank cannot be denied. An average annual gain of 26% since Beating the S&P 500 by nearly three times during that period. Earning a 43.8% total return from when the stock markets suffered record declines. Now, in this report, you ll receive highlights on 7 stocks from the more than 200 companies that compose the coveted Zacks #1 Ranked list of Strong Buys. Remember only 5% of all stocks covered by the proprietary Zacks Rank system have the promise and potential to beat the market in the next 30 days like these #1 stocks. Inside this report, you ll discover the company financials, earnings data and analysis of these 7 promising companies. The return numbers presented assume no transaction costs. Details of how Zacks calculates performance for the Zacks Rank Portfolios and strategies is available at: 2

4 Almost Family (AFAM) Almost Family (AFAM) is a $400 million provider of home health nursing, rehabilitation and personal care services, with 90 locations in 11 states. Specializing in adult day health care services, the company is focused on providing alternatives for seniors and other special needs adults who wish to avoid nursing home placement. Riding the tailwinds of three primary trends, AFAM saw its revenues climb 39% in 2014 and earnings grew 42% year-over-year. The three trends have been the Affordable Care Act, an aging population with 10,000 people coming of retirement age every day, and the rising preference among seniors needing additional care to have more control and choices about that care. AFAM is a Zacks #1 Rank (Strong Buy) because analysts have been bumping up EPS estimates for 2016 with the consensus climbing 17% in the past 90 days. This is on top of 17% EPS growth for 2015, which we should get confirmation of when the company reports their Q results. 3

5 Bank of the Ozarks, Inc. (OZRK) Bank of the Ozarks, Inc. (OZRK) is a mid-cap regional bank headquartered in Arkansas with 174 offices. On Jan 14, the company reported its fourth quarter 2015 results and once again beat the Zacks Consensus Estimate. Earnings were $0.57 compared to the Zacks Consensus Estimate of $0.56. It has a tremendous earnings record. It has either met or beat every quarter over the last 5 years. There are only about 40 companies that can say they have done the same. Net income was a record $51.5 million, a 48.1% increase from $34.8 million in the fourth quarter of It also saw a record $182.3 million in net income for the year, up 53.7% year over year. Returns on average assets were 2.11% for the year; the 6th year returns on average assets were over 2%. It saw record quarterly growth of $1.08 billion in non-purchased loans and leases to end the year. For investors looking for a regional bank with a solid track record, the Bank of the Ozarks should be on your short list. 4

6 Cracker Barrel (CBRL) Cracker Barrel (CBRL) is an interesting choice for investors ahead of its earnings report next month. Many of CBRL s locations are along interstate highways. Since pretty much everyone needs to drive to get to a store, the company could be a prime beneficiary of lower gasoline costs. Analysts seem to agree with this line of thinking as we have seen some upward movement in the Zacks Consensus Estimate of late, as well as positive earnings estimate revisions. CBRL currently has a very positive Zacks Earnings ESP of over 3% right now. When you add this to Cracker Barrel s Zacks Rank #1 (Strong Buy), you have a very good case for an earnings beat at the upcoming report. Plus, the company has a great track record at earnings season, including an average beat of over 9% in the past four reports. CBRL has clearly shown it can live up to lofty expectations and analysts are really liking the story heading into the upcoming earnings report. 5

7 HCA Holdings (HCA) HCA Holdings (HCA) is a nongovernmental hospital in the U.S. providing health care and related services. This Zacks Rank #1 (Strong Buy) has Zacks Style Scores of A for Value, Growth and Momentum. The December 2015 quarter saw a surprise of 30 cents, or 21% above the Zacks Consensus Estimate. Revenue was ahead of expectations as well. This positive surprise helped push earnings estimates higher for this year and next. The Zacks Consensus Estimate for 2016 was calling for EPS of $5.81 in December of last year. Following the recent beat, the estimate jumped to $6.22. For the following year, the estimate moved from $6.38 to $6.81, which implies some strong earnings growth next year. The forward PE for HCA is 11.4x compared to a 14.2x industry average. The stock also trades at 0.7x sales, a level that will excite most value investors. 6

8 MicroStrategy (MSTR) MicroStrategy (MSTR) designs, develops, markets, and sells enterprise-ready analytics, mobile, and security software platforms worldwide. The company reported $3.38 a share versus the Zacks Consensus Estimate of $1.81, a massive 92% beat on EPS. This beat marks the fifth straight upward surprise going back to early last year. Revenue of $144 Million was 4% better than last year. In addition, product license revenues increased 20%, operating expenses decreased 12%, and operating income increased 38%. Cost cutting was a major part of the EPS beat, after the company improved on operating expenses, sales/marketing and G&A. The combination of product revenue performance and cost cutting are driving the stock higher. Expect analysts to raise estimates for the year, as the strong EPS trend continues. The stock is still well short of its 52-week high, making current levels attractive for entry. 7

9 International Game Tech. (IGT) International Game Technology (IGT) is engaged in the design, development, manufacture and marketing of casino-style gaming equipment, systems technology, and game content. Analysts have recently raised estimates for the current year and next year, underscoring its status as a Zacks Rank #1 (Strong Buy). Add two straight earnings surprises to the upside and you have a pretty compelling story. IGT may be due for a bounce here. Shares have come under pressure over the last year, dropping from over $21 in April to a low of $13.50 earlier this month. There may be some support here at $14 though, as the commodity channel index has bounced a bit from below -100 to Should shares continue to show strength and IGT rally a bit that CCI is likely to cross the zero line and give a buy signal technical traders may jump on. 8

10 ServiceNow Inc. (NOW) ServiceNow Inc. (NOW) provides cloud-based services that automate enterprise IT operations. In their most recent earnings report, ServiceNow substantially beat both the Zacks Consensus Earnings and Revenue Estimates. The company posted total revenues of $285.7 million, up +44% from the year ago quarter, with billings improving +41% YoY to $1.2 billion. Further, the company had $227.6 million of free cash flow, posting an increase of 169% year over year. Going into Q1 16, management expects to see total revenues in a range of $298-$303 million, which would represent growth between 41%-43%. Moreover, the company expects to see billings in a range of $360-$365 million, amounting to a year over year growth level between 34-36%. Due to their strong quarterly performance and future guidance, earnings estimates have improved over the past 7 days. 9

11 What to Do Next In addition to the hand-selected picks included in this special report, you can move yourself way ahead of the crowd in any market environment with the following: As part of this free report, you will now receive our free daily e-newsletter, Profit from the Pros. Each morning, Executive Vice President Steve Reitmeister will summarize the market, what it means for investors and what to do next. Plus you get links to articles featuring some of our top stock, ETF and mutual fund recommendations. Be sure to look for it in your inbox before the markets open every day. Now you should bookmark our homepage to take advantage of one of the most complete investment websites around. Go there now: Even better, get all Zacks private buys and sells through our Zacks Ultimate program. Watch our trades and market insights from all of Zacks private portfolios from growth to value to momentum stocks, from insider moves to big earnings surprises, from options to ETFs, even trades EVP Steve Reitmeister makes in his personal account, and much more. This see-everything arrangement is unique: one month, one dollar, not one cent of further obligation. Learn more about the Zacks Ultimate Trial now. 10