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Wednesday, September 27, 2006

Predicting Stocks That Will Beat and Miss Estimates Ahead of Earnings Season

Stock Tickers: SAIA, UHS, CINF, F, HET, BRC

StarMine is an analyst tracking service we like to review and to refer to. This service is essentially an analyst "of the analysts' predictions and they monitor analysts' track records on the calls they make. They break it down by sector, but more importantly they break it down by individual stocks. Based on the "5-star" rating of certain analysts in a given stock, StarMine actually goes out and derives its own earnings prediction for companies that may exceed or miss the street estimates ahead of each earnings season. This is the sort of behavior we have done on many select names in the past, but they do it on most of the liquid stocks out there.

If you can believe it we are essentially within 3 weeks of the next earnings season that will begin in the second week of September and go into full-tilt earnings season mode in the 3rd and 4th weeks of September.

Today on CNBC StarMine gave some interesting predictions around 1:55 PM EST on CNBC. The gave a short list of 3 companies that they felt would exceed estimates and 3 they felt would miss. They use who they deem as the best 5-star analyst for each stock.

We have each StarMine prediction noted as Consensus estimates, Brokerage 5-star analyst prediction, and by the implied StarMine estimate based on a blend of the two. We took this one step further by including today's stock price, its dollar gain/loss so far today, and we even provided an adjusted 52-week trading range to show if it was at the high-end or low-end of each range.

The ones that StarMine thinks will BEAT estimates:

SAIA Inc. (SAIA) $0.63 consensus; Morgan Keegan at $0.67; so StarMine is predicting $0.66.
SAIA $32.29, up $0.01; 52-week trading range $14.70 to $34.04.

Universal Health (UHS) $0.62 consensus; $0.64 at B of A; so StarMine is predicting $0.63.
UHS $60.10, up $0.41; 52-week trading range $44.50 to $59.84.

Cincinati Financial (CINF) $0.72 consensus; Keybanc $0.76; so StarMine is predicting $0.74
CINF $48.20, down $0.05; 52-week trading range $39.91 to $48.55.

The ones that StarMine thinks will MISS estimates:

Ford (F) -$0.53 consensus; Citigroup is far lower on it; so StarMine predicts -$0.70.
F $8.12, down $0.29; 52-week trading range $6.06 to $10.04.

Harrah's (HET) $1.00 consensus; Calyon is lower; so StarMine is predicting $0.97.
HET $65.66, up $1.01; 52-week trading range $57.29 to $83.33.

Brady (BRC) $0.61 consensus; R.W.Baird is 0.50; 0.56 is StarMine.
BRC $35.34, up $0.13; 52-week trading range $26.98 to $42.79.

Last quarter they were 3 for 3 on positives on Wesco (WSO), Investment Technology Group (ITG) and IntercontinentalExch (ICE). Not all stock prices followed with higher prices but ITG & ICE were noted well. We look forward to tracking these predictions. Please keep in mind that StarMine only chose 6 names here, and that is a fraction of their stock coverage universe. Here is a link to view a snapshot of their subscriber services.

Jon C. Ogg
September 27, 2006
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