Zacks Earnings and Margins Strategy highlights: American Financial Group, Diodes, Metalico and Mitcham Industries

Business Wire, Nov 5, 2007

CHICAGO -- Earnings are the single most important metric for a company. Combine that with a healthy Net Profit Margin and you find a screen that has generated a cumulative return of 623.7% since January 2001. For 2006, this Profit Track has returned 23.4%. For the first month of 2007, this Profit Track returned 4.0%. This screen is called the Earnings and Margins Profit Track strategy. Here are four stocks meeting this screen's exclusive criteria: American Financial Group, Inc. (NYSE: AFG), Diodes Inc. (NASDAQ: DIOD), Metalico, Inc. (AMEX: MEA) and Mitcham Industries, Inc. (NASDAQ: MIND). View the entire list of stocks for the Earnings and Margins Profit Track at http://at.zacks.com/?id=1858

Here are four companies that meet the following Earnings and Margin Profit Track:

American Financial Group, Inc. (NYSE: AFG) enjoyed strong performances across most of its businesses in the third quarter, leading to a more than 20% year-over-year rise in core earnings per share to 97 cents from 79 cents. The result also beat the consensus by more than 14%. American Financial Group also raised its 2007 core EPS guidance to between $3.70 and $3.80, and also set its 2008 guidance at $3.75 to $3.95. This Zacks #2 Rank passes the test for the Earnings and Margins profit track with an almost 25% gain in its most recently-completed year and a net margin of 11%.

Diodes Inc. (NASDAQ: DIOD) recently announced solid third-quarter results, including earnings per share of 38 cents on revenue of $105.3 million. The earnings result advanced from last year's 30 cents while revenue increased 13.7% from $92.6 million. The microchip maker attributed its results to gains in Asia and Europe, as well as positive results for its strategic initiatives. In addition to the quarterly results, there are other factors that show Diodes as a strong fundamental company with healthy earnings. It's most recently-completed year displayed earnings growth of almost 35% over the previous year and its net margin stands at 14%. As a result, Diodes is a member of the Earnings and Margins profit track.

Metalico, Inc. (AMEX: MEA) is a scrap metal recycler and lead products fabricator. This Zacks #2 Rank is also a part of the Earnings and Margins profit track with a net margin of 5% and an approximate 95% year-over-year earnings gain in its most recently-reported year. For its third quarter, Metalico announced earnings per share of 17 cents, marking a positive surprise of more than 21% over the consensus and also beating the year-earlier result. Sales reached $102.1 million from $55.4 million. Excluding acquisition, sales advanced 18%. The quarter was helped by good performances from acquired companies, rising metal prices and an overall favorable metal market conditions.

Mitcham Industries, Inc. (NASDAQ: MIND) qualifies for this profit track with a net margin of 19% and earnings growth of more than 16% in its most recently-reported year. (This screen calls for both of the above parameters to be at or greater than zero.) For its fiscal second quarter, Mitcham Industries reported earnings per share of 17 cents on total revenues of $15.4 million. The earnings results advanced year over year from 12 cents and topped the consensus by almost 31%. Revenues advanced 40% from $11 million. The geophysical equipment supplier also raised its revenue guidance for fiscal 2008 to between $60 million and $65 million, versus the previous guidance of $55 million to $60 million.

Discover all the current stocks currently on the Earnings and Margin Profit Track at: http://at.zacks.com/?id=1859

About Profit Tracks

What is a "Profit Track"? Each Profit Track is a successful stock picking strategy with proven results through the Bear Market of 2001-2002 and the Bull run started in 2003. On Zacks.com we have created these nine unique screens to offer investors great strategies to potentially outperform the market in the years ahead. In 2006, the Low Price Stocks strategy was the top performing Profit Track with a return of 56.5% followed by the Discounted Fundamental screen with a 34% return. To see all nine strategies along with philosophy, past performance, and current stocks, go to http://at.zacks.com/?id=1838

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