Word of the Day

Commodity

Even if you don't think you do, you already know plenty about commodities. Want us to prove it? No problem.

What makes oil produced in Saudi Arabia different from oil exported from Nigeria? It's the same thing that makes the corn you ate at last summer¿s barbecue different from the corn used to produce ethanol. Stumped? Well, don't feel bad, it's a trick question. The answer? Absolutely nothing. Corn is corn no matter where it comes from -- just as wheat is wheat and natural gas is -- right! -- natural gas. (Though the quality may differ, the make-up is uniform.)

So, in less elaborate terms, corn and oil (and all other commodities) are homogenous goods that can be processed, resold and more often than not, used as an input to the production of other goods or services. These goods are traded on a commodity exchange, thus setting the price-per-barrel (or other metric unit) used to value them.

Now pay attention, here's a question that indeed does have an answer: What is the difference between a commodity and a stock? While a stock can tank and become worthless, a commodity cannot have its value be wiped to zero. One other difference: Most commodities are traded in futures, meaning traders buy and sell where they think the price of a product will be at a certain point in the future. Stocks trade based on the value of the underlying company at that point in time.

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Friday, July 18, 2008

Zacks Sell List Highlights: Coventry Health Care, AU Optronics Corp, Saks, Salix Pharmaceuticals

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Comtex

CHICAGO, Jul 18, 2008 (BUSINESS WIRE) ----Zacks.com releases details on a group of stocks that are currently members of the exclusive Zacks #5 Rank List - Stocks to Sell Now. These stocks are currently rated as a Zacks Rank #5 (Strong Sell): Coventry Health Care, Inc. (NYSE: CVH) and AU Optronics Corp (NYSE: AUO). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Saks, Inc. (NYSE: SKS) and Salix Pharmaceuticals, Ltd. (NASDAQ: SLXP). To see the full Zacks #5 Rank List - Stocks to Sell Now visit: http://at.zacks.com/?id=92

Since inception in 1988, the S&P 500 has outperformed the Zacks #5 Rank List -- Stocks to Sell Now by 129% annually (+5.3% vs. +12.1%). While the rest of Wall Street continued to tout stocks during the market declines of the last few years, Zacks told investors which stocks to sell or avoid.

Here is a synopsis of why CVH and AUO have a Zacks Rank of #5 (Strong Sell) and should most likely be sold or avoided for the next one to three months. Note that a #5 Strong Sell rating is applied to 5% of all the stocks in the Zacks Rank universe:

Coventry Health Care, Inc. (NYSE: CVH) sharply lowered its operating earnings outlook for the second quarter and fiscal 2008, citing unexpectedly high costs. Management now expects FY08 EPS in the range of $3.65 to $3.75 from prior $4.39 - $4.50. Shares of CVH are down almost 50% YTD. The combination of renewed cost trend concerns and lack of management visibility over last 3 months means this stock has challenging issues ahead of it.

AU Optronics Corp (NYSE: AUO) has had its earnings estimates lowered substantially by analysts in last 30 days. Soft demand trends appear to be applying pricing pressure. Earlier in the week, the company reported weaker sales for June 08, showing a decline of 17 % sequentially and down 6 % from a year ago period. Rising inventory levels are expected to pressure the profitability of the company.

Here is a synopsis of why SKS and SLXP have a Zacks Rank of 4 (Sell) and should also most likely be sold or avoided for the next one to three months. Note that a #4 Sell rating is applied to 15% of all the stocks ranked by Zacks;

Saks Inc. (NYSE: SKS) is the only pure play, publicly-traded luxury retailer. The stock is down over 50% in the last twelve months, and is trading close to a 5- year low. This sell-off comes on the heels of a severely weakened consumer environment, as the American economy continues to struggle. Comps for June were marginally better than May, driven likely by tax refunds. Concerns about the macro environment and the impact on consumer spending through the remainder of this year into next year will continue to pressure this stock for the foreseeable future.

Salix Pharmaceuticals, Ltd. (NASDAQ: SLXP) has fallen upon hard times, largely because of the genericization of its key product Colazal. This is bad news news for Salix, as Colazal has been a major component of its profitability. It will be challenging to convert users to the new formulation now that generics are available. The possibility of a patent challenge for another key product, Xifaxan, will remain an overhang on the shares in the coming quarters. Salix expects to approach profitability in 2009 and achieve the 2007 level of revenue and EPS in 2010.

Truly taking advantage of the Zacks Rank requires the understanding of how it works. The free special report; "Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions" is available to provide this insightful background. Download a free copy now to prosper in the years to come at http://at.zacks.com/?id=93

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 +32.2%. 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 129% annually (+5.3% vs. +12.1%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of Zacks Rank Buy stocks and highlights those stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=94

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=95

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

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.

SOURCE: Zacks.com

Zacks.com Contact: Michael
   Vodicka Phone: 312-265-9226 Email: pr@zacks.com Visit: www.Zacks.com

Copyright Business Wire 2008 **********************************************************************
   As of Monday, 07-14-2008 23:59, the latest Comtex SmarTrend� Alert, an automated pattern recognition system, indicated a DOWNTREND
   on 05-23-2008 for AUO @ $18.43. As of Monday, 07-14-2008 23:59, the latest Comtex SmarTrend Alert, an automated pattern recognition
   system, indicated a DOWNTREND on 06-16-2008 for CVH @ $41.56. As of Monday, 07-14-2008 23:59, the latest Comtex SmarTrend
   Alert, an automated pattern recognition system, indicated a DOWNTREND on 06-10-2008 for SKS @ $11.92. For more information
   on SmarTrend, contact your market data provider or go to www.mysmartrend.com SmarTrend is a registered trademark of Comtex
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