Zacks Releases Four Powerful 'Buy' Stocks: Yingli Green Energy Holding Company Limited, McDonald's Corp., LSI Industries Inc., and Cheesecake Factory, Inc.

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Oct 28, 2010, 08:01 ET

CHICAGO, Oct. 28 /PRNewswire/ -- Four free stock picks are being made available today on Zacks.com. The industry's leading independent research firm highlights one Zacks #1 Rank Strong Buy or a Zacks #2 Rank Buy stock for each of the four main styles of investing: Aggressive Growth, Growth & Income, Momentum, and Value.

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The four highlighted picks are: Yingli Green Energy Holding Company Limited (NYSE: YGE), McDonald's Corp (NYSE: MCD), LSI Industries Inc. (NYSE: LYTS) and Cheesecake Factory (NYSE: CAKE).

Today, Zacks is promoting its ''Buy'' stock recommendations. Four daily picks are offered free at http://at.zacks.com/?id=7841

Zacks #1 Rank Stocks have tripled the S&P 500 since 1988, producing an average annual return of +27%. Performance has been notable even during volatile and down times. For example, during the last bear market, 2000-2002, the market tumbled -37.6% – but Zacks #1 Rank stocks gained +43.8%.

Here is a summary of today's selected stocks that are now highly rated by Zacks:

Aggressive Growth:

LSI Industries Inc. (LYTS) is a great turn-around story, climbing to a Zacks #1 Rank (Strong Buy) on the most recent earning announcement.

Growth rates are through the roof as the company begins to reap the benefits of its new strategic initiatives. Shares are at multi-year highs but still trade with solid multiples.

Company Description

LSI Industries is an "Image Solutions" company that focuses on LED technology for lighting and graphics. The company designs and makes products for the commercial and retail markets as well as niche applications.

Crushed Expectations

On Sep 21 LSI Industries reported first-quarter results for fiscal 2011 that showed an 18% jump in revenue, to $80 million. Operating income almost tripled to $6.6 million, producing EPS of 18 cents.

The Zacks Consensus Estimate was just 4 cents, giving LSI Industries back-to-back surprises. Comments from the company's CEO were bullish.

LSI Industries had been in the process of reworking its long-term strategy and he said "we are now beginning to reap the benefits" of those efforts. He also mentioned, "Looking forward we are optimistic about our continued growth in solid-state LED lighting."

Estimates Light Up

Following the release, the full-year Zacks Consensus Estimate more than doubled, to 35 cents from 17 cents. Next year's estimates are averaging 49 cents, up 16 cents since the report.

Given the 12 cents earned in fiscal 2010, the growth rates are fantastic, with 192% this year and another 39% in fiscal 2012.

Zacks Guide to Aggressive Growth Investing (free!): http://at.zacks.com/?id=4309

Growth & Income:

Shares of McDonald's Corp (MCD) have been on a roll lately. The world renowned fast-food giant went through the Great Recession virtually unscathed as cash-strapped consumers flocked to the company's Value Menu.

Investors have flocked to the stock as McDonald's continues to deliver impressive results by sticking with what it does best - delivering food fast and cheap - and also expanding its menu to offer deluxe coffees and smoothies.

The company recently delivered another strong quarter, prompting analysts to raise their estimates.

Third Quarter Results

On October 21, McDonald's reported third quarter earnings per share of $1.29, beating the Zacks Consensus Estimate by 5 cents. It was a 15% over the same quarter in 2009.

Total sales grew 6.0%, including a 5.3% jump in the U.S. Same-store sales in the U.S. improved 5.3%, largely due to strong sales from the company's Frappes and Smoothies.

Sales growth was particularly strong in the company's Asia/Pacific, Middle East and Africa division, which saw a 16% increase year-over-year.

The company was able to manage expenses well, as operating income grew 11%.

Zacks Guide to Growth & Income Investing (free!): http://at.zacks.com/?id=4310

Momentum:

Cheesecake Factory, Inc. (CAKE) recently jumped to within striking distance of its multi-year high after reporting solid Q3 results that included a 9% earnings surprise. With estimates on the rise and a bullish growth projection, this Zacks #1 rank stock is a VIP member of the momentum club.

Company Description

The Cheesecake Factory, Inc. owns and operates more than 165 upscale, full-service restaurants in the United States. The company was founded in 1972 and has a market cap of $1.7 billion.

The stronger global economy of the last 12 months has helped retailers and restaurants alike as consumer regain the confidence so spend discretionary income. That dynamic lifted CAKE to solid third-quarter results on October 21 that came in ahead of expectations.

Third-Quarter Results

Sales for the period were up 4.5% from last year to $418 million. Earnings also came in strong at 37 cents, 9% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 13% over the past four quarters.

Same-store sales at the company's flagship restaurant Cheesecake Factory were up 2.8%.

Margins looked solid too, with operating margin up 70bps from last year to 7.5%.

Zacks Guide to Momentum Investing (free!): http://at.zacks.com/?id=4311

Value:

Solar companies were hit hard during the recession and once high flying stocks came crashing back down to earth along with sales. But the industry has turned the corner and estimates are now rising on companies like Yingli Green Energy Holding Company Limited (YGE).

The solar sector, as a group, is trading cheaply at just 10.3x forward estimates. Yingli Green is among those solar companies attractively valued at 11.8x forward estimates which is well under the S&P 500 at 14.9.

Headquartered in China, Yingli manufactures photovoltaic modules to customers around the world including those in all the big solar buying nations such as Germany, Spain, Italy, France, South Korea, the United States and China.

Zacks Consensus Estimates Rising

Yingli Green isn't expected to report third quarter results until Nov 11 but recently analysts have been raising 2010 and 2011 estimates as the outlook for the solar sector has brightened.

2 estimates have moved higher for 2010 in just the last week, pushing the 2010 Zacks Consensus up to $1.00 from 96 cents a month ago.

At this rate, earnings per share would grow by 213.7%.

The good times are expected to last until 2011, as the Zacks Consensus has climbed 13 cents to $1.31 per share in the last 30 days.

That is continuing earnings growth of 30%.

Zacks Guide to Value Investing (free!): http://at.zacks.com/?id=4312

How to Regularly Access Picks from the Zacks Rank Discovery for Free: http://at.zacks.com/?id=7841

Underlying the four free stock picks is a simple truth that first appeared in a Financial Analysts Journal article published in 1979. Leonard Zacks, a Ph.D. in Mathematics from M.I.T. found that "earnings estimate revisions are the most powerful force impacting stock prices." Zacks #1 Rank is awarded to a stock when analysts sharply upgrade their estimates of what the company will earn.

Today, Zacks is promoting its stock recommendations by offering four daily picks free to those who register at http://at.zacks.com/?id=7841

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms. It monitors more than 200,000 earnings estimates, looking for changes.

Then, when changes are discovered, they're applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock-picking system continues to outperform the market by a nearly 3-to-1 margin.

More Free Stock Picks

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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.

Zacks.com

Aggressive Growth Stocks:
Contact: Bill Wilton
Phone: 312-265-9277

or

Growth & Income Stocks:
Contact: Rob Plaza
Phone: 312-265-9442

or

Momentum Stocks:
Contact: Michael Vodicka
Phone: 312-265-9226

or

Value Stocks:
Contact: Tracey Ryniec
Phone: 312-265-9232

Email: [email protected]
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