Zacks.com releases the latest Zacks Industry Rank. Stocks featured
in this week's analysis include Coca-Cola Enterprises (NYSE: CCE),
Coca-Cola Femsa (NYSE: KOF), Home Depot (NYSE: HD), Lowe's (NYSE: LOW)
and
Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.
Cost of goods sold rose 6%. Higher concentrate and sweetener costs
were the main culprits behind the increase.
The even better news for PBG shareholders is the company raised
its full-year guidance. PBG expects profits to be in a range of
Brokerage analysts seem to expect fellow bottler Coca-Cola
Enterprises (NYSE: CCE) to also provide a bullish outlook when it
reports on
Coca-Cola Enterprises is Zacks #1 Rank ("strong buy") and
Moving on....
The outlook for home improvement retailers is not getting any
better. Yesterday, Home Depot (NYSE: HD) cut its full-year profit
guidance, again. HD expects profits to be in a range
Equally telling is the company's same-store sales forecast. Home Depot now expects total retail sales to be down 1-2% this year. In February, it predicted that sales would be up 0-2%. The company has also lowered the number of new stores it plans to open, 108 versus 115. The forecast for same-store sales remains unchanged with an expectation of a mid-single digit decline.
Compounding matters were statements by Standard and Poor's and Moody's that they were putting hundreds of mortgage back securities - many of which are investment grade - on watch for potential downgrades. Both agencies are worried about losses in the mortgages that back those securities. Many of the securities being monitored are investment grade.
Throwing even more salt on the wound were warnings from two homebuilders.
The housing correction is continuing and despite calls to the contrary, an end to the slump does not appear to be in sight. This is why Building Product-Retail/Wholesale contains four Zacks #4 Rank ("sell") stocks, including Lowe's (NYSE: LOW). Home Depot is currently a Zacks #3 Rank ("hold") stock, but this may reflect that the fact that not all of the covering analysts have reacted to yesterday's announcement.
The interactive Zacks Industry Rank List allows you to see all of the companies, and their Zacks Rank, within more than 200 industries. See the list at http://at.zacks.com/?id=3208.
About Zacks Industry Rank and the Zacks Rank
Zacks Industry Rank is calculated by averaging the Zacks Rank for all covered companies within a given industry. The Zacks Rank is assigned to approximately 4400 stocks and ranges from #1 ("Strong Buy") to #5 ("Strong Sell"). Both the Zacks Industry Rank and the Zacks Rank are quantitative indicators designed to cover periods of 1-3 months.
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 132% annually (+5.1% vs. +11.9%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
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(a) Zacks Rank performance is the total return (price changes +
dividends) of equal weighted portfolios, consisting of those stocks
with the indicated Zacks Rank, assuming zero transaction costs. These
returns are not the result of a backtest; these are actual returns
since 1988. The stocks in the Zacks Rank portfolios were available to
Zacks clients before the beginning of each month (monthly
rebalancing). Performance results from 1988 through
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Source: Zacks.com