Krispy Kreme Beats, Raises Outlook – Analyst Blog

Krispy Kreme Doughnuts Inc.’s (KKD) second quarter fiscal 2011 earnings were 3 cents per share, which outdid the Zacks Consensus Estimate of zero per share. The company also reported profit of $2.2 million compared to a loss of $0.16 million posted in the prior-year quarter. The better-than-expected results were driven by a growth in the top line.
 
Total revenue climbed 6.3% year - over - year to $87.9 million and also out performed the Zacks Consensus Estimate of $84.0 million. All the four segments reported increase in revenues. Segment-wise, Company stores revenues were flat year over year at $60 million, Domestic franchise revenues spiked up 15.1% to $2.1 million, International franchise revenues upped 5.3% to $4.0 million and KK Supply Chain revenues (including sales to Company stores) were up 18.9% to $44.9 million.
 
For the seven consecutive quarters, same store sales at Company stores rose 5.7%. Domestic franchise same store sales grew 5.0%, while International franchise same store sales declined 14.3%.
 
Direct operating expense, as a percentage of total revenue, surged 140 basis points to 87.5% and general and administrative expenses dropped 20 basis points to 5.6%. As a result, operating income expanded 41.2% to $4.2 million and operating margin perked up 110 basis points to 4.7%.
 
Interest expense reduced $0.7 million from the prior-year quarter to $1.6 million due to a decline in debt.
 
Stores Update
 
During the quarter, Krispy Kreme opened 20 franchise stores and 2 company-owned stores and closed 4 franchises and 1 company-owned store. Thus, as of August 1, 2010, the company has 84 company stores and 549 franchise stores.
 
Financial Position
 
Krispy Kreme ended second quarter 2011 with cash and cash equivalents of $21.2 million and shareholders’ equity of $72.8 million. As of August 1, 2010, long-term debt was $41.2 million versus $42.7 million at the end of January 31, 2010.
 
Outlook
 
Based on the first half results, the company raised its adjusted operating income guidance for fiscal 2011. The company now expects adjusted operating income in a range of $13 million to $17 million, up from its previous forecast in the range of $11 million to $15 million.

 
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September 3, 2010 | Filed Under Analyst Opinions | Leave a Comment 

Earnings Scorecard: Medtronic – Analyst Blog


Subsequent to the announcement of Medtronic’s (MDT) first quarter fiscal 2011 results on Aug 24, 2010, majority of the analysts have lowered their estimates for the forthcoming period.

First Quarter Highlights

Medtronic began fiscal 2011 on a disappointing note. The company reported an adjusted EPS of 80 cents, which missed the Zacks Consensus Estimate by two cents but was a penny higher than the year-ago quarter. However, first quarter of fiscal 2010 included an extra week, which had a positive impact of 5 cents. Excluding the impact, the EPS recorded a growth of 8%.


Revenues were $3.77 billion, down 4% compared to the year-ago quarter and missed the Zacks Consensus Estimate of $3.95 billion. However, after considering unfavorable currency movements ($21 million) and the benefit of an extra week in the year-ago quarter ($200 million), revenues increased 2%.

Based on a disappointing quarter, Medtronic lowered its guidance for 2011. Earlier in June, the company at an analysts’ meet projected a 5%-8% revenue growth based on market growth of 4%-7%. However, the company witnessed a market growth of 3%-4% during the quarter based on which revenues and adjusted EPS are expected to increase 2%-5% at constant exchange rates and 9%-11% (earlier guidance 10%-13%), respectively.

For a full coverage on the earnings, read: Medtronic Misses, Lowers Guidance.

Estimate Revision Trends

In accordance with the company’s disappointing performance in the first quarter and lowering of outlook, the recent Zacks Consensus Estimate revision trends remain negative for the upcoming period.

Over the past 30 days, 20 of the 23 analysts covering the stock have made downward revisions for the second quarter without any opposite movement. The negative trend persists for the third quarter as well with 16 downward revisions and 3 in the reverse direction.

The situation remains unchanged for fiscal 2011 with 21 of 26 analysts lowering their estimates in the past 30 days. For fiscal 2012, 18 analysts have revised their estimates downward without any upward movement.

Many factors were responsible for the dismal performance of the company during the first quarter. Medtronic had witnessed a deceleration in both volumes and procedures resulting from the current macro environment which led to high unemployment and increasing patient deductibles. This in turn forced hospitals to lower their bulk purchases in July across many of the company’s businesses and geographies. Moreover, the company also witnessed some impact of recent austerity measures undertaken in Europe, though not dramatic, in certain markets.

Another factor that hampered Medtronic’s business during the quarter was increasing pricing pressure. The situation worsened in Japan where reduced reimbursement resulted in significant decline in some of the company’s products.

Revenues derived from two of the largest segments of Medtronic – CRDM and Spinal declined by 8.3% and 9%, respectively. Medtronic was not able to hold on to the market share gain following Boston Scientific’s (BSX) halt of implantable cardioverter-defibrillators (ICDs) shipment. Although Medtronic expects to recapture some of the lost share with the launch of Protecta ICDs, its launch is tied to the resolution of a manufacturing related issue with the US Food and Drug Administration (FDA).

Based on current market conditions and estimating the CRDM market to grow at 0%-3%, the company expects revenues from this segment to remain flat in fiscal 2011.

The decline in revenues derived from the Spinal business can be attributed to current macroeconomic conditions which are causing delays in elective procedures due to high co-pays and expired benefits. This in turn has resulted in lower growth of the overall market driven by decline in both procedures and price mix.

According to company estimates, during the first quarter, growth in the US spine market has declined by 400 basis points sequentially and is currently growing in the low to mid-single digits. Based on current conditions, Medtronic expects revenue growth from this segment to remain flat with a 3%-4% growth in the spine market.

Magnitude of Estimate Revisions

The magnitude of estimate revisions for the forthcoming period has been significant. In the past 30 days, estimates for the second and third quarters have dropped by 3 cents to 82 cents and 2 cents to 85 cents, respectively. Moreover, estimates for fiscal years 2011 and 2012 have reduced by 7 cents to $3.42 and 15 cents to $3.67, respectively, in the past 30 days.

Our Recommendation

Although we are encouraged by the growth of the CardioVascular and Diabetes segments, we remain concerned about CRDM and Spinal. Growth in the two markets (CRDM, Spinal) has slowed considerably which is reflected in the results. Pricing pressure and slower market growth forced Medtronic to lower its outlook for these segments. The situation can worsen further if the economic condition deteriorates further. Given these headwinds in the near future, we have a Zacks #4 Rank (sell) on the company.

However, Medtronic has a strong portfolio which is gaining acceptance. Moreover, the company’s strong pipeline has the potential to drive revenues going ahead. Although Medtronic is witnessing pricing pressure in the US market, it earns 41% of its revenues from international operations. It is increasing its focus on emerging markets and is targeting at increasing revenue contribution from this region. Besides, a strong cash position bodes well for suitable acquisitions. However, the company is operating in a highly competitive environment and is exposed to currency fluctuation.

Given the long-term outlook of the company, we are Neutral on the stock.

About Earnings Estimate Scorecard
Len Zacks, PhD in mathematics from MIT, proved over 30 years ago that earnings estimate revisions are the most powerful force impacting stock prices. He turned this ground breaking discovery into two of the most celebrating stock rating systems in use today. The Zacks Rank for stock trading in a 1 to 3 month time horizon and the Zacks Recommendation for long-term investing (6+ months). These “Earnings Estimate Scorecard" articles help analyze the important aspects of estimate revisions for each stock after their quarterly earnings announcements. Learn more about earnings estimates and our proven stock ratings at http://www.zacks.com/education/
 
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Arthur Hill: YIELDS RISE AND BONDS FALL ON JOBS REPORT — SMALL-CAPS START SHOWING RELATIVE STRENGTH — UTILITIES UNDER PRESSURE AS RATES SURGE — XLB AND XLY ARE ALREADY CHALLENGING SUMMER HIGHS — SPY AND DIA HOLD WEDGE BREAKOUTS — QQQQ AND IWM SUCCESSFULLY TEST SUPPORT

[[http://stockcharts.com/members/videos/|Link for today’s video.]] A better-than-expected employment report combined with positive revisions to July weighed on bonds. Bonds surged in August as the...
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Synopsys Wraps Up Virage Deal – Analyst Blog


Electronic design automation (EDA) software company Synopsys Inc. (SNPS) recently completed the acquisition of Virage Logic Corp. (VIRL) for $12 per share. The total consideration of the deal came in at approximately $315.0 million.

Virage Logic’s business is expected to integrate easily with Synopsys, as the former provides semiconductor intellectual property (IP) for the design of complex integrated circuits. In a way, this acquisition is expected to supplement Synopsys' Designware platform, as well as its Intellectual Property product category.

The company has adopted acquisitions as a growth strategy. Earlier, it added technology, engineering resources and other such assets of Synfora, Inc. to its portfolio. Synfora provides C/C++ design technology, for complex system-on-chips (SoCs) and Field-Programmable Gate Arrays (FPGAs).

This acquisition was intended to strengthen Synopsys’ position in the FPGA-based prototyping solutions business. By using Synfora's technology, designers will be able to manufacture better integrated circuits. In short, the acquisition will enhance the company’s technical efficiency, as well as its product and service portfolio.

Apart from acquisitions, Synopsys’ time-based license revenue model also offers good momentum. This contributes almost 85% to total revenue. Under this system, customers rent the software, rather than paying a one-time upfront license fee. Hence, this is a much more predictable model, providing better visibility through a steady and recurring revenue stream.

Of course, the model does not provide a competitive advantage, as the revenue recognition model is more or less similar to its peers. Therefore, moving forward, we believe Synopsys will have to find new avenues to outperform in the space.

We believe that currently the company is in a consolidation phase as it reported year-over-year revenue declines, while earnings per share were a bit above our expectations in the third quarter. This apart, the company is also witnessing bookings growth, and exploring untapped markets. These efforts are expected to reap results in fiscal 2011.

Although 2011 is expected to be a growth year, the 2010 guidance does not reflect any meaningful growth. Synopsys is gaining traction from new products and new EDA partnerships, but we believe these factors will take some time to produce favorable results.

Additionally, the semiconductor industry is currently witnessing an inventory glut, so 2010 demand will be lower than originally estimated.

Currently, we have a long-term Neutral recommendation and a short-term Zacks Rank #3 (Hold) on the stock.
 
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H&R Block Beats Zacks Consensus – Analyst Blog


H&R Block’s (HRB) fiscal first-quarter loss from continuing operations came in at 36 cents per share, lower than the Zacks Consensus Estimate for a loss of 41 cents a share as well as the year-ago loss of 39 cents per share. Net loss from continuing operations for the quarter was $114.8 million versus a loss of $130.6 million reported in first-quarter 2010.

Primarily, the realignment of field and support services announced in May along with share buyback helped the company to ameliorate loss during the quarter.

Including severance charges related to termination benefits in connection with the realignment of field and support services announced in May of $12.8 million, or 4 cents per share and loss from discontinued operations of $3.0 million or 1 cent per share, the company reported a loss of $130.7 million or 41 cents per share. The reported loss in the quarter was lower than the loss of $133.6 million or 40 cents per share a year ago.

Revenue for the reported quarter was $274.5 million, down 0.4% from $275.5 million recorded in the year-ago quarter. Lower revenues across all the segments resulted in the year-over-year decline. However, the result surpassed the Zacks Consensus estimate of $269 million.

Total operating cost declined 0.9% year over year to $485.0 million in the first quarter of 2011. Realignment of field and support services announced in May aided in the cost cut.

The company reported an operating loss of $210.6 million, down 0.5% from $214.2 million reported in the prior-year quarter.

Segment Performance

Tax Services revenue was $91.6 million in the first quarter of 2011 compared with $88 million in the year-ago period, up 4.2% year over year.

Excluding $19.2 million, the charge related to severance costs and related payroll taxes associated with staff reductions, total expenses declined by $12.8 million, or 4.9% year over year, to $247.1 million in the quarter.

The segment reported a pretax loss of $174.6 million, a wider loss than $172.0 million incurred in the prior-year quarter.

Business Service revenue totaled $174.7 million for the quarter, down 1.6% from $177.6 million in the year-ago quarter.

Total expenses declined $1.2 million, or 0.7%, from the prior year.

Pretax loss reported by the segment was $0.4 million compared with a pretax income of $1.3 million a year ago.

RSM McGladrey acquired the Boston-based accounting firm Caturano & Company in July. Though the acquisition is expected to add $30 million to the fiscal 2011 top line, it will have negligible impact on earnings for this fiscal year.

Corporate and Eliminations posted revenue of $8.1 million compared with $9.9 million in the prior-year quarter.

Segment pretax loss was $32.3 million, narrower than a loss of $40.2 million in the prior-year quarter. Decreased loss provisions on mortgage loans held for investment and gains on residual interest assets from the company's former mortgage business helped H&R Block to reduce the loss at the segment.

Financial Position

H&R Block ended the year with cash and cash equivalents of $1.14 billion compared with $1.05 billion at the end of first-quarter 2010. Total outstanding long-term debt at first-quarter 2011 end was $1.46 billion, lower than $1.53 billion at the end of first-quarter 2010.

Net cash provided by operating activities in the quarter under review was $348.3 million versus $454.6 million in the first quarter of 2010.

Share Repurchase and Dividend

During the reported quarter, H&R Block repurchased and retired 15.5 million shares at a cost of $235.7 million.

H&R Block will also pay a quarterly cash dividend of 15 cents per share on Oct 1, 2010, to shareholders of record on Sep 10, 2010.

The company’s realignment initiatives remain on track. Also, the company remains focused on increasing its client retention rate. However, a lackadaisical top-line keeps us on the sidelines.

We maintain a Neutral recommendation on H&R Block. The quantitative Zacks #4 Rank (short-term Sell rating) for the company indicates downward pressure on the shares over the near term.
 
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September 3, 2010 | Filed Under Analyst Opinions | Leave a Comment 

Microchip Remains Outperform – Analyst Blog


Following robust earnings in its latest quarter, we have reiterated our Outperform recommendation on Microchip Technology Inc. (MCHP).



Microchip reported solid results for the first quarter of fiscal 2011 driven by broad-based growth across all geographical regions as well as the three product lines – Microcontrollers, Analog and Serial electrically erasable programmable read only memory products (EEPROMs).



We believe the top-line has gained momentum at Microchip Technology after taking a hit in late 2008 and early 2009. The first quarter of fiscal 2011 marked its fifth consecutive quarter of revenue growth.



Microchip is well positioned in its core microcontroller market. The increasing demand for embedded control systems – approximately $10.7 billion in 2009 – has made microcontrollers one of the larger segments in the semiconductor market. Microchip is among the top five players in the global microcontrollers market.



In late 2008 – early 2009, the downturn in the U.S. and global economies adversely impacted the company’s key markets. However, Microchip has seen an improvement in end market demand across all product lines in the last twelve months.

Microchip continues to be a leading player in the 8-bit and 16-bit microcontroller space. Design activities for 8-bit flash microcontrollers continue to be strong. In addition, Microchip is targeting the high-performance 16-bit microcontroller market and the demand is reflecting strong momentum. Thirdly, the 32-bit microcontroller product line continues to make good progress.



The Analog business continues to be strong with solid growth from linear, interface, mixed-signal, safety, security and radio frequency product lines.



Microchip has provided strong guidance for the second and third quarters. Sales are expected to grow at 6% – 7% sequentially in the September quarter. For the December quarter, management continues to see robust demand driven by exceptionally strong new design wins in all of the strategic product lines.

Microchip will increase its manufacturing capacity to meet the projected demands of all of its customers in the December quarter. The company currently expects sales to grow 3% sequentially.



With signs of recovery and continued strong performance, we remain positive on the stock and expect Microchip to deliver solid results in the coming quarters. The dividend yield of 4.80% continues to be the key attractive feature.



However, the stock carries a Zacks #3 Rank which translates into a short-term rating of Hold. This might be due to the fears of a recessionary double-dip in the latter half of 2010, which will adversely impact capital spending in the technological sector along with extended lead times in the semiconductor industry.
 
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Cooper Profit Grows, Lifts View – Analyst Blog


Eye-care and surgical product maker Cooper Companies Inc. (COO) reported better-than-expected third-quarter fiscal 2010 (ended July 31, 2010) results with adjusted earnings per share of 91 cents outshining the Zacks Consensus Estimate of 71 cents and the year-ago earnings of 54 cents.

Adjusted earnings exclude litigation settlement charges, restructuring costs and acquisition expenses. Net profit zoomed 81% year-over-year to $39.7 million (or 86 cents a share) boosted by healthy performance at the company’s CooperVision (CVI) eye-care division and lower sales costs.

The healthy results coupled with management’s upbeat guidance pushed up Cooper’s shares that leapt $1.74 (or 4.22%) to $43 in after-hours trading on Sep 2.

Revenues

Revenues rose 4% year-over-year to $295.6 million as the company gained market share in its CVI business. However, sales missed the Zacks Consensus Estimate of $297 million.

Sales at the CVI division grew 3% year-over-year to $249 million on the back of higher sales from toric lenses (up 9% year-over-year) and single-use sphere lenses (up 10%), partly offset by declines in multifocal lenses (down 7%) and non-single-use sphere lenses (down 2%). Revenues from the CooperSurgical (CSI) surgical division increased 5% year-over-year to $46.6 million boosted by higher sales of hospital products (up 18%).

Margin Analysis

Gross margin improved to 60% from 51% a year-ago, supported by higher revenues and manufacturing efficiency gains at the CVI unit. Higher gross margin helped the company to improve operating margin in the quarter which rose to 17% from 12% a year-ago.

Financial Condition

Cooper ended the third-quarter with cash and cash equivalents of roughly $3.2 million, down 14% year-over-year. The company de-leveraged its balance sheet in the quarter as total debt declined by $66.3 million sequentially to $646.7 million. Cooper generated $75.3 million cash from operation and spent $16.9 million on capital expenditures, resulting in a free cash flow of $58.4 million.

Outlook

Based on strong third-quarter results, Cooper raised its outlook for fiscal 2010. The company lifted its adjusted earnings per share guidance for the year to $2.83-$2.91 from the prior forecast of $2.50-$2.60. This compares favorably with the current Zacks Consensus Estimate of $2.56. Revenues for the year are now expected to range between $1.14 billion to $1.15 billion, up from the prior view of $1.11 billion to $1.17 billion. Cooper also hiked its free cash flow expectation to $177-$187 million from $140-$160 million.

For fourth-quarter fiscal 2010, the company expects revenues in the range of $292-$307 million. Adjusted earnings have been forecasted between 82 cents and 90 cents while free cash flow is expected in the range of $15-$25 million.

Cooper is a global medical products company specializing in a wide range of contact lenses for the vision correction market. The worldwide contact lens market is poised for accelerated growth. Higher prices, international expansion and increase in contact lens utilization rates in developed markets (given the declining drop-out rates) will act as tailwinds for this market expansion.

However, Cooper faces significant competition across each of its product segments from well-established contact lens manufacturers such as Johnson & Johnson (JNJ) and Novartis (NVS). Depressed levels of consumer spending have exacerbated competitive pressures on the company.

Nevertheless, Cooper’s healthy margin is expected to be sustainable driven by increased manufacturing capacity utilization and further leverage of the high-volume plants in the U.K. and Puerto Rico. Further, the impact from the Norfolk contact lens manufacturing plant closure is expected to be visible in fourth-quarter fiscal 2010.
 
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Applied DNA Initiated at Outperform – Analyst Blog

Unique Anti-Counterfeiting Technology

Applied DNA Sciences, Inc. (APDN) is a biotech company engaged in the research, development and commercialization of botanical-DNA based security and authentication solutions that can help protect the products, brands and intellectual property of companies, governments and consumers from theft, counterfeiting, fraud and diversion. The company has authentication labs and manufacturing facilities in Stony Brook, New York and Huddersfield, Yorkshire, UK.

Currently, Applied DNA markets two principal anti-counterfeiting and product authentication solutions: SigNature DNA and BioMaterial Genotyping; both can be used in numerous industries, including cash-in-transit (transport and storage of banknotes), textiles and apparel, identity cards and other secure documents, pharmaceuticals, wine and luxury consumer goods. Both platforms have spawned a series of product offerings which differ by the industry vertical to which the product is sold.

Applied DNA’s technology holds competitive advantages over its competitors. The company’s principle product, SigNature DNA, uses a unique DNA technology which cannot be replicated. The core technology of Applied DNA is to use the DNA of everyday plants to mark objects in a unique manner, and then identify these objects by detecting the absence or presence of the DNA.

The company’s products target the extraordinary large cash-in-transit and general anti-counterfeiting markets. We expect continued rapid growth of the general anti-counterfeiting market in the next few years. Therefore, the outlook for Applied DNA is very positive, in our view.

Applied DNA has an experienced management team and the company has an appropriate growth strategy in place to take advantage of the current demand for its products.

We are optimistic about the company’s prospects. With an ever-growing anti-counterfeiting business worldwide, combined with its unique technology and broad range of product offering, the company is well positioned to boost both its top line and bottom line in the coming years.

According to our long term financial model, the company’s revenue will grow at a huge compound annual growth rate (CAGR) of 105% in the next five fiscal years from 2010 to 2015. The company will become profitable in fiscal 2014 with earnings per share (EPS) of $0.01.

We rate the company an Outperform. Our six to twelve-month price target is $0.20.
 
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September 3, 2010 | Filed Under Analyst Opinions | Leave a Comment 

What’s the Best Strategy for Today’s Market? – Weekend Wisdom

There are lots of different trading styles out there: Momentum, Aggressive Growth, Value, Growth & Income, and more.

Some of these are more conservative while others are more aggressive.

But which one works best?

Let’s take a look.

Momentum Style

Momentum traders look to take advantage of upward trends (or downward trends) in a stock's price or earnings. They believe that these stocks will continue to head in the same direction because of the momentum that is already behind them.

For this momentum study we'll use one of our strategies called Big Money Zacks.

This method of course finds stocks on the move. And aside from focusing on the best Zacks Rank stocks, along with a few other fundamental filters, the main drivers to this particular screen (once we've narrowed down the list) are as follows:

First it selects the top 20 Price Performers over the last 24 weeks.

Next, from those 20 above, it selects the top 10 Price Performers over the last 12 weeks.

Then, from those remaining 10, it selects the top 3 Price Performers over the last 4 weeks.

How Did It Do?

Wow!

So is this the best style?

Maybe for some. But maybe not for others.

The Momentum Style is typically a short-term trading strategy. And this method was designed to be rebalanced once a week, which means you'll be buying and selling new stocks every week. Great if you're an active trader. Not so much if you aren't.

You'll also find yourself getting in on stocks that have already made big moves or that are making new 52-week highs. And it works. But for some, high flyers and fast movers aren't the kinds of stocks they want to get into.

Maybe getting into a stock that's low in its price recognition cycle or finding undiscovered gems is more to your liking.

So let's take a look at the Value Style.

Value Style

Value investors and traders favor good stocks at great prices over great stocks at good prices. This does not mean they have to be cheap stocks in price though. The key is the belief that they're undervalued. That they are, for some reason, trading under what their true value or potential really is. The value investor hopes to get in before the market 'discovers' this and moves higher.

For the value style study, let's use our strategy called R-Squared EPS Growth.

This one too uses the Zacks Rank along with a unique way of finding trendline growth rates. (That's where the name R-Squared Growth came from.) But don't let the name fool you; this is a straight up value screen that keys in on different classical valuation metrics.

How Did This One Do?

This strategy was designed to have a longer holding period of 4 weeks, which means this strategy would be rebalanced essentially once a month rather than once a week.

Moreover, the very nature of the screen (and the Value Style) is such that it tries to reduce volatility and minimize risk while at the same time outperforming the market.

And while this more conservative style may not produce the kinds of triple-digit returns that a Momentum Style or an Aggressive Growth Style can, the smoother ride it provides while still outperforming the market may be just what you're looking for.

Or maybe a Growth & Income Style approach with core holdings that pay nice income producing dividends is what you're really after.

This kind of strategy will tend to focus in on the more mature companies with solid revenue and consistent payouts.

You'll also have a longer time horizon with this style (at least 12 weeks), especially since you'll want to hang onto your stocks long enough to receive the dividend.

Then again, the allure of getting in on a newer company and watching it blaze a trail of success, as an Aggressive Growth Style will try and find, may be your goal instead.

Aggressive Growth traders are primarily focused on stocks with aggressive earnings growth or revenue growth (or at least the potential for aggressive growth).

You'll often find smaller-cap stocks in this category.

And while this style will typically require a more hands on approach to monitor how these companies are doing, it can be well worth it when the method is hitting its stride.

And the #1 Trading Style Is...

The style that's right for you!

No one style is better than the other. They're just different from each other.

And that's fine.

The #1 trading style is the style that's right for you.

Why?

Because if you find yourself getting into stocks that are not in alignment with who you are or want to be as a trader, you'll find yourself dropping that strategy the moment the market hits a rough patch. Or talking yourself out of winning trades altogether, because you're uncomfortable being in stocks that don't fit your style.

The Strategies Work Best When You Use Them

The best trading strategy in the world won't make you any money if you don't use it.

And the more confident you are in your strategy the more apt you will be to use it.

To build confidence in your trading, remember to first:

  1. Identify what kind of trader you are or want to become. This will help you find the style(s) that are right for you. And don't worry about fitting perfectly into one style or another. Many people will be a combination of several styles rolled into one.

  2. Once you understand the different styles and where you fit in, you can then concentrate on what kinds of items will help you pick the stocks that have those characteristics so you'll always get into the right ones.

  3. Don't give up. As mentioned above, the most successful trading strategies work best when you use them. One you've indentified your style and the method to pick those stocks, make sure to follow a proven profitable trading strategy to increase your odds off success. This will give you the confidence to stick with it and to maximize your returns.

You Can Do It

And to get started, you may want to look into our Zacks Method for Trading: Home Study Course. It's a DVD/workbook set that guides you to better trading step by step. In it, we go over in detail how to identify what kind of trader you are, how to find those stocks with the right style characteristics, and how to trade them so you can consistently beat the market. You can also explore some of our best performing strategies from all of the different trading styles and learn how to create your own.

If you're interested, be sure to check it out now. There is a limited supply of materials so access must be restricted. Since a few spots are still available, I'm offering Weekend Wisdom readers like you a special arrangement that had expired earlier in the week. Until 11:59 pm Saturday night, you can get into this learn-at-home program at our cost.

Click here to learn more.

Thanks and good trading.

Kevin

Kevin Matras
Vice President, Zacks Investment Research

Zacks VP Kevin Matras is our chart patterns and stock screening expert. He runs the Research Wizard and personally developed many of its built-in market-beating strategies. He also directs the Zacks Method for Trading: Home Study Course.


 
Zacks Investment Research

September 3, 2010 | Filed Under Analyst Opinions | Leave a Comment 

Atheros Completes Opulan Acquisition – Analyst Blog


Atheros Communications Inc. (ATHR) announced that it has completed the previously announced acquisition of privately-held Opulan Technologies Corp. for approximately $72 million.


Atheros might pay additional cash to shareholders in the coming twelve months only if Opulan meets certain business targets.

California based Atheros develops semiconductor system solutions for communication products. Its products include solutions for wireless local area network (WLAN), mobile WLAN, Ethernet, Bluetooth, global positioning system (GPS), and powerline communications.

Opulan is a Chinese fabless semiconductor company, which specializes in providing solutions for passive optical networking (PON) and broadband access aggregation (MUX). The company was founded in 2003 and employs 111 people. Oplulan serves leading Original Equipment Manufacturers (OEMs) addressing the growing networking market in China.


PON is expected to be a significant portion of the growing fiber-to-the-home (FTTH) market. According to Infonetics Research, the market for PON equipment is expected to more than double between 2009 and 2014. The ramp in PON demand is being driven by the global upgrade of the existing broadband infrastructure to support ever-increasing bandwidth needs arising out of increased video delivery and content sharing.

The acquisition will further broaden Atheros’ capabilities in the networking market along with expanding its footprint in Asia. The addition of Opulan's team will augment Atheros' workforce in China, providing an opportunity to increase its engineering and customer support for the large broadband deployments that have been planned for the region.

The addition of Opulan’s Ethernet PON and MUX technologies will enable Atheros to provide carriers with an end-to-end (WAN-to-LAN) broadband architecture for the home and multi-dwelling unit. The transaction is expected to be neutral to 2010 earnings.
 
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Zacks Investment Research
September 3, 2010 | Filed Under Analyst Opinions | Leave a Comment 

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