Zacks.com Expert Watch Highlights the Following Stocks: Dell, Delphi Financial Group, and Harley-Davidson

Business Wire, Oct 27, 2004

CHICAGO -- Zacks Experts announce commentary and recommendations on three stocks: Dell (NASDAQ:DELL), Delphi Financial Group (NYSE:DFG), and Harley-Davidson (NYSE:HDI). Employing various timing and investment strategies, Zacks Experts Watch gives valuable insight to individual investors, especially in turbulent markets. For the full commentary, visit; http://at.zacks.com/?id=101

Here are the highlights from the Experts Watch column:

Investors must be constantly aware of sector strength, as that is the closest tie that stocks have with the economy. There are, however, other factors to take into consideration when considering the types of stocks you want in your portfolio. One such factor, capitalization, is an axis along which investors should be sure to diversify. Investors should also use relative performance of companies with differing market capitalization to guide the timing of new purchases. Discover what capitalization stocks that relative performance points to right now and one other factor that you should be aware of in the earnings report of the companies you own.

Many times this space has cited Experts who insist that stock-picking, and not index investing is the best way to make money in this market. Those same experts stressed broad diversification, but argue that simply buying index funds is not the way to accomplish it. Richard Moroney, editor of Dow Theory Forecasts warns that the Dow Jones Industrial Average is only 30 companies and the S&P 500 is dominated by just 50 stocks, or 10% of that average. Moroney thinks investors can outperform those two indices "without much additional risk...by diversifying broadly and looking for attractive stocks in all corners of the markets."

Sometimes the bottom line is not the bottom line. Richard Moroney notes that nonrecurring charges are excluded from companies' quarterly earnings statements. While corporate boards exclude those charges because they do not feel the charges present an adequate picture of their companies' earnings, Moroney notes that "charges may offer advance warning of poor share-price performance."

Moroney feels the following stocks have solid track records of clean earnings.

Dell (NASDAQ:DELL) has gained share in the personal-computer market every year since 1995. The company is expanding internationally and moving into new markets, such as consumer electronics and printers. Dell says it has garnered a 10% share of the U.S. ink-jet printer market since it entered the business a year ago. Dell generates strong free cash flow -- nearly $3 billion in the last four quarters. The company boasts a healthy balance sheet, with $5.5 billion in cash and investments and long-term debt equal to just 7.4% of total capital.

Delphi Financial Group (NYSE:DFG) is benefiting from rising demand for excess workers'-compensation insurance. The company plans to expand its sales force by more than 15% in 2004, which should help boost profits in coming quarters. Before 2000, Delphi managed a fairly aggressive investment portfolio. Since then, the company has sold off its riskier assets, reducing volatility and smoothing earnings. The stock is a Focus List Buy.

Harley-Davidson (NYSE:HDI) has posted sales growth of at least 14% and per-share profit growth of at least 20% in each of the last eight years. In the September quarter, Harley's earnings rose 24% to $0.77 per share, $0.02 higher than the consensus estimate. Revenue rose 15% to $1.3 billion. Consensus estimates project profit growth rates of 18% in 2004 and 14% in 2005.

Read the full report with insight from the experts at Zacks.com: http://at.zacks.com/?id=102

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