For Immediate Release
Chicago, IL - March 12, 2012 - Today, Zacks Investment Ideas
feature highlights Features:
Top 3 Small Caps Over 3 Months
Small cap stocks have done very well of late, but what are the
top 3 small cap stocks over the last 3 months based on return and
are Zacks #1 Rank (Strong Buy) or Zacks #2 Rank (Buy)?
Let's take it from the bottom to the top in order of
performance... that way we can build a little suspense. For those
of you that want a little more information of what makes a stock a
#1 Rank or a #2 Rank. This is our
for a further description.
) is a post-secondary education company in operating the United
States and Canada. As of June 30, 2011, the Company had a student
enrollment of 93,457 and operated 106 schools in 26 states, and 16
schools in the province of Ontario, Canada.
COCO has moved higher on the strength of a sizeable earnings
beat. The company reported the December 2011 quarter in early
February. Revenues of $415 million were $2 million ahead of the
Zacks Consensus Estimate and EPS of $0.04 were $0.03 ahead of the
Zacks Consensus Estimate. That is a 300% beat which pushed the
stock higher by an amazing 44%. It should also be noted that the
broader market saw a large advance on the same day earnings were
Estimates have moved higher for COCO.
Prior to the recent beat, the Zacks Consensus Estimate was
calling for 2012 earnings of $0.23. Following the report, that
number rose to $0.32. That is a 39% increase and something that
investors tend to reward stock for. Similarly, estimate for 2013
also moved higher. In January 2012, the estimate for 2013 stood at
$0.43 and following earnings the new Zacks Consensus Estimate is
Multiples are still quite low.
You would think a stock that has moved higher by 95% over the
last twelve weeks would have sky high multiples for the major
metrics most investors follow. That is not the case for COCO.
Forward PE of 13x would bring most value players to the table for
the discussion and they may even start to salivate when they hear
that the company trades at 0.64x book. That is some real value
still to be realized!
COCO is up 95% in the last 12 weeks.
) is our second biggest small cap performer over the last 12 weeks.
Once again, a strong earnings report can be pointed to as a major
driver for the growth.
Arctic Cat, Inc. operates in a single industry segment and
designs, engineers, manufactures and markets snowmobiles and
all-terrain vehicles under the Arctic Cat brand name, as well as
related parts, garments and accessories. The company markets its
products through a network of independent dealers.
ACAT reported earnings on January 26, 2012 and posted a huge
blowout. Revenue of $207 million was $25 million or 13% ahead of
the Zacks Consensus Estimate and an increase from the $152 million
reported in the year ago period.
Earnings per share of $0.92 were $0.34 or 58% ahead of the Zacks
Consensus Estimate and almost double the $0.50 recorded the same
period last year. As a result of this blowout, the stock moved
higher by 28% following the report.
Estimates Moving Higher
Before the blowout, the Zacks Consensus Estimate for ACAT was
calling for 2012 earnings to be $1.22. After the report analysts
adjust numbers higher to $1.68, or a 38% increase. The same can be
said of expectations for 2013 as analysts were looking for $1.84 in
December of 2011, moved to $2.33 and are currently looking for
$2.44 or a 33% increase.
Valuation for ACAT
Investors can expect a stock that has doubled in 12 weeks to
trade at a premium to its industry. While that is true for ACAT
there is at least one metric that still shows some room for growth.
Price to sales of 0.88x still shows that there could be more room
for growth in ACAT, especially when compared to the industry
average of 0.74x. Even when looking at forward PE, ACAT does not
look widely outpriced at 23x next twelve months earnings.
ACAT is up 103% in the last 12 weeks.
) is the best performer that is a Zacks Rank #2 (Buy). Logic would
tell you that the other top 3 performers had solid earrings beats,
and that HK must have really blown out the quarter. Once again,
logic would be wrong. HK has missed, and missed badly on its last
Halcon Resources is an independent energy company, engages in
the acquisition, production, exploration, and development of
onshore oil and natural gas properties in the United States.
So why up so much? Well a recapitalization of RAM Energy
Resources clouds the picture. HK made an investment in RAM which is
comprised of $275 million in new common stock, a $275 million
five-year convertible note, and warrants for the purchase of an
additional 110 million shares of common stock.
Upon closing of the transaction, RAM will issue 220 million
shares of common stock to Halcon, representing approximately 74% of
RAM's pro forma outstanding common stock. The $275 million
convertible note will bear interest at 8% per annum and may be
converted by the holder into shares of common stock at any time
subsequent to two years from the closing date, subject to earlier
conversion under certain circumstances. The conversion price will
be $1.50 per share, subject to adjustment upon certain events. The
warrants will be exercisable for five years from the closing date
at an exercise price of $1.50 per share, subject to adjustment upon
HK is up 172% in the last 12 weeks.
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