The Zacks Analyst Blog Highlights: Acadia Healthcare, Micron Tech and Pantry

News provided by

Dec 09, 2014, 09:30 ET

CHICAGO, Dec. 9, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Acadia Healthcare (Nasdaq:ACHC-Free Report), Micron Tech (Nasdaq:MU-Free Report) and Pantry (Nasdaq:PTRY-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Monday's Analyst Blog:

Will There Be a Santa Claus Rally?

A wintry December is here (rainy for us Californians, thankfully). Will a Santa Claus rally appear?

Odds are likely, but it is not assured. In December, U.S. share markets trade a full-year 2015 earnings landscape -- and on a slosh of global money. Fair value computations price a firm 2015 earnings and revenue growth outlook.

Look forward. S&P 500 cyclical sectors produce annual 2015 EPS growth.

The San Fran Fed Considers Stock Market Gains

According to the latest macro post from the San Fran Fed, stock market gains have been an important feature of U.S. economic expansion.

The ratio of the Standard & Poor's (S&P) 500 stock market index capitalization to GDP is currently around 100% -- approximately double the value that prevailed at the market bottom in Q1-2009. While elevated, the ratio remains below the value of 126% that was observed at the market peak in Q1-2000.

On top of that, the ratio of New York Stock Exchange margin debt to GDP has risen sharply in recent years and is currently near all-time highs, signaling the increasing willingness of investors to buy stocks using borrowed money. Similar sharp rises in the ratio of margin debt to GDP in 1999 and 2006–07 were followed by major downturns in stock prices.

Shiller's Cyclically Adjusted P/E Ratio

The cyclically adjusted price-earnings ratio (P/E10) for the S&P 500 stock market index is a metric that economist Robert Shiller has advocated to help judge whether the stock market is overvalued.

The ratio is computed as the real, or inflation-adjusted, value of the S&P 500 index divided by real earnings averaged over the 10 most recent years.

The current P/E10 ratio of 25.7 exceeds the long-run historical average of 16.6 but remains below the values of 32.6 and 44.2 observed at the market peaks in 1929 and 2000, respectively.

Bull-Bear Spreads

Similar to the P/E10 ratio, a higher bull-bear spread -- that is, the balance of bullish versus bearish individual investors from surveys -- also predicts lower future real growth in stock prices over the subsequent 10-year period.

Using the average historical relationship, the observed bull-bear spread in October 2014 would predict mildly positive real growth in stock prices over the next 10 years.

Again, however, there are many examples in the data that deviate from the average historical relationship on both the upside and the downside.

Zacks Sector/Industry/Company Telescope

The strongest S&P 500 sectors are domestic Health Care and IT. Transports (Air, Rail and Trucks) look great. Xmas analyst earnings estimate upgrades showed up in Apparel, Leisure, Food/Drug Retail and Non-food Retail.

(1) Health Care remains the top Very Attractive sector. The clear winter leader is Medical Care. Medical Products and Drugs look Attractive.

Zacks #1 Rank Company to Look at: Acadia Healthcare (Nasdaq:ACHC-Free Report)

This company provides inpatient behavioral health care services. It provides psychiatric and chemical dependency services too.

(2) Info Tech is the other Very Attractive sector. Look to Semiconductors and Computer-Office Equipment. Ranking upgrades here show business cap-ex spending picked up, and an end-of-year spending flurry has hit home.

Zacks #1 Rank Company to Look at: Micron Tech (Nasdaq:MU-Free Report)

Idaho-based Micron is a provider of advanced semiconductor solutions.

(3) Consumer Discretionary is upgraded to an Attractive sector this month. Apparel, Leisure and Home Furnishings-Appliances look more Attractive after the oil price collapse and the emergence of Xmas season.

Zacks #1 Rank Company to Look at: Pantry (Nasdaq:PTRY-Free Report)

The Pantry, Inc. is an operator of convenience stores.

(4) Financials are Attractive. Look to cyclical Insurance and Real Estate.

(5) Industrials are at the top of Market Perform. The Transports are Very Attractive. The leaders here are Business Products, Airlines (after the fall in oil deepened) and Railroads & Trucking.

(6) Telcos are Market Weight at best.

(7) Utilities are Market Weight at best.

(8) Consumer Staples are a Very Unattractive sector. Stay away from Beverages, Soaps & Cosmetics Agri-business & the Food industries.

(9) Materials are Unattractive. Stay away from Paper, Metals-Non-Ferrous and Chemicals. The exception is Building Products. That industry is hot.

(10) Energy is a Very Unattractive Sector. Coal is the worst-ranked sector across the board. The oil price collapse hit all the Oil & Gas industries hard. Stay away. There's a contrarian play: Energy-Alternates got an upgrade.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; 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.

Get the full Report on ACHC - FREE

Get the full Report on MU - FREE

Get the full Report on PTRY - FREE

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

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.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/the-zacks-analyst-blog-highlights-acadia-healthcare-micron-tech-and-pantry-300006859.html

SOURCE Zacks Investment Research, Inc.