Zacks Buy List Highlights: D.R. Horton, Inc., Grant Prideco, Inc., Pulte Homes, and Rowan Companies, Inc

Business Wire, August 18, 2005

CHICAGO -- Zacks.com releases another list of stocks that are currently members of the coveted Zacks #1 Rank (Strong Buy) List. The #1 Rank stocks highlighted today are D.R. Horton, Inc. (NYSE:DHI) and Grant Prideco, Inc. (NYSE:GRP). Further, Zacks announced #2 Rankings (Buy) on two other widely held stocks: Pulte Homes (NYSE:PHM) and Rowan Companies, Inc. (NYSE:RDC). To see the full Zacks #1 Rank (Strong Buy) List, or the rank for any other stock, visit: http://at.zacks.com/?id=88

Stocks ranked #1 (Strong Buy) by Zacks have produced an average annual return of 33% since inception in 1988. During the 2000-2002 bear market, Zacks #1 Rank stocks gained 43.8% while the S&P 500 tumbled 37.6%.

Here is a synopsis of why DHI and GRP have a Zacks Rank of 1. Note that a #1 Strong Buy rating is applied to only 5% of all the stocks Zacks ranks:

D.R. Horton, Inc. (NYSE:DHI) recently reported fiscal third-quarter earnings of $1.17 per share, outperforming last year's 80 cents and exceeding the consensus estimate by about 9%. The company noted that it set all-time quarterly records for net income, gross profit margin, sales units, sales dollars and sales order backlog. DHI also increased its earnings guidance to be in the range of $4.35 to $4.40 for the fiscal year ending September 2005. Analysts' most recent estimates of $4.41 per share are above one month ago levels by 30 cents, or about 7%.

Grant Prideco, Inc. (NYSE:GRP) recently released its second-quarter report stating that each of the its operating segments improved significantly over last year's second quarter, benefiting from strong market demand across its product lines. Earnings per share of 41 cents were much higher than the prior year's 10 cents and almost 37% above the consensus estimate. The company also mentioned that its expects strong market conditions to continue and raised the full year 2005 earnings guidance to $1.60 to $1.65 per share. Analysts are in agreement as evidenced by their advancement of 2005 estimates to $1.65 per share from $1.29 one month ago.

Here is a synopsis of why PHM and RDC have a Zacks Rank of 2 (Buy). Note that a #2 Buy rating is applied to 15% of all the stocks ranked by Zacks:

Pulte Homes (NYSE:PHM) recently posted second-quarter earnings of $2.30 per share, beating the consensus estimate by almost 11% and outpacing last year's $1.45. The company said that as a result of its record year-to-date results and expectations for continued strength in its operations, it is again raising its 2005 earnings guidance for continuing operations to the new range of $10.00 to $10.50 per share. Analysts followed suit, bringing full year 2005 estimates to $10.60 per share from $10.14 a month ago. PHM also announced a two-for-one stock split, the effect of which will be reflected in its third quarter financial results.

Rowan Companies, Inc. (NYSE:RDC) recently reported second-quarter earnings of 33 cents per share, reversing last year's loss of two cents and eclipsing the consensus estimate by approximately 6%. The company mentioned that the near-term prospects for its drilling operations have never been better. Earnings estimates for the year ending December 2005 moved up 11 cents, or almost 8%, over the past 30 trading days.

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About the Zacks Rank

For over 16 years, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank stocks have generated an average annual return of 33%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained 43.8%, while the S&P 500 tumbled 37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have underperformed the S&P 500 by 143.5% annually ( 4.9% vs. 12%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

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