Zacks Industry Rank Analysis Highlights: Agrium, Bank of America, CF Industries,...

Zacks Industry Rank Analysis Highlights: Agrium, Bank of America, CF Industries, Keycorp and Mosaic

CHICAGO--(Business Wire)--
Zacks.com releases the latest Zacks Industry Rank. Stocks featured
in this week's analysis includes Agrium (NYSE: AGU), Bank of America
(NYSE: BAC), CF Industries (NYSE: CF), Keycorp (NYSE: KEY) and Mosaic
(NYSE: MOS). To see the Zacks Industry Rank and the trend in earnings
estimates revisions for more than 200 industry groups, visit
http://at.zacks.com/?id=3154.

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA,
Senior Market Analyst for Zacks.com.

Rice prices hit another record on Tuesday. News that some
exporters are cutting sales and a large purchase from the Philippines
helped to drive rice to new highs for the fourth consecutive day.

The rally is occurring amid reports of global food shortages
caused by the rising cost of rice, wheat and related commodities.
Egyptian President Hosni Mubarak has ordered his army to bake bread
for the poor. (Last week, Mubarak's administration announced plans to
suspend rice exports for six months.) In Haiti, UN peacekeepers are
trying to protect the presidential palace from violence caused by food
protests. Thailand is giving consideration to having soldiers guard
grain stockpiles. Bloomberg reported this morning that the U.S.
offered the Philippines as much rice as it needs.

Unfortunately, the problem is likely to get worse, not better,
over the short-term because of growing demand for crops. Ethanol usage
is competing with food at the same time global economic growth has
enabled more people to afford food and eat beyond just a subsistence
diet. Any problems caused by Mother Nature, be it drought or floods,
will only worsen the situation.

Certainly, humanitarian crises should not be viewed as
opportunities to profit. But, the spike in food prices is being caused
by the futures market and economic demand, not the stock market.
Furthermore, each investor needs to decide whether it would be best to
create wealth so that they can donate a larger amount of money (and
time) to charity or if it's better to stay out of industries that one
feels uncomfortable about. This is a question that each investors
needs to answer for themselves.

For those of you who would prefer to build wealth in order to help
make the world a better place, Fertilizers remains one of the top
ranked industry groups. This group has continually been the
beneficiary of positive earnings estimate revisions for more than a
year. Soaring commodity prices have allowed fertilizer companies to
raise prices and enjoy record profits.

Just last week, Mosaic (NYSE: MOS) achieved record fiscal
third-quarter results. Revenues surged 68% to $2.1 billion and per
share earnings reached $1.10 versus 10 cents a year prior. Higher
prices and widened gross margins helped MOS to surpass brokerage
analysts' expectations by 36%, or 31 cents per share. Like its peers,
MOS was able to pass along higher costs because of strength within the
agricultural sector.

Following the report, brokerage analysts raised both the fiscal
2008 and fiscal 2009 consensus earnings estimates for MOS. The average
forecast calls for the company to earn $3.91 this fiscal year and
$8.21 per share next year. These projections are two cents and 50
cents higher than a week ago.

Two of Mosaic's peers, Agrium (NYSE: AGU) and CF Industries (NYSE:
CF) were also the beneficiaries of analyst optimism. Two brokerage
analysts raised their full-year forecasts on AGU and CF during the
past seven days.

What's interesting about all three fertilizer companies is that
they remain reasonably valued relative to forecast earnings. AGU
trades at about 14x projected 2008 earnings, CF trades at 11.5x
expected 2008 profits and MOS trades at 14.6x projected fiscal 2009
earnings. All three are Zacks #1 Rank ("strong buy") stocks.

Moving on...

Ahead of upcoming first-quarter reports from the large banks,
brokerage analysts are continuing to lower their full-year profit
forecasts. Brokerage analysts cut their 2008 full-year projections on
Bank of America (NYSE: BAC) and Keycorp (NYSE: KEY) within the past
week. These cuts occur as multiple brokerage analysts have also
lowered their 2009 forecasts.

There is scuttlebutt that the bad news has been already been
priced in, but I would argue that many investors are relying more on
pure hope than actual facts. Consider the trend in estimate revisions.
One year ago, 244 earnings estimates for 2007 were revised upwards and
325 estimates were revised downwards on financial companies, a
revisions ratio of 0.75. As of yesterday, 212 estimates were revised
upwards and 758 estimates were revised downwards for 2008, a revisions
ratio of 0.28.

In other words, not only have more earnings estimates been
revised, but the trend is far more negative. None of this would be so
bad, if similar trends were not also apparent in forecasts for 2009.
Bluntly put, the trend in estimate revisions implies that investors
betting on a recovery within the financial sector might be waiting
longer than they expect.

BAC is a Zacks #5 Rank ("strong sell"). KEY is a Zacks #4 Rank
("sell") stock.

The interactive Zacks Industry Rank List allows you to see all of
the companies, and their Zacks Rank, within more than 200 industries.
See the list at http://at.zacks.com/?id=3208.

About Zacks Industry Rank and the Zacks Rank

Zacks Industry Rank is calculated by averaging the Zacks Rank for
all covered companies within a given industry. The Zacks Rank is
assigned to approximately 4400 stocks and ranges from #1 ("Strong
Buy") to #5 ("Strong Sell"). Both the Zacks Industry Rank and the
Zacks Rank are quantitative indicators designed to cover periods of
1-3 months.

Since 1988, 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 +32%. 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 129% annually (+5 % vs.
+12%). Thus, the Zacks Rank system allows investors to truly manage
portfolio trading effectively.

Zacks "Profit from the Pros" e-mail newsletter offers continuous
coverage of the industries and the stocks poised to outperform the
market. Subscribe to this free newsletter today by visiting
http://at.zacks.com/?id=2564.

Visit http://www.zacks.com/performance for information about the
performance numbers displayed in this press release.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which
was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew
he could find patterns in stock market data that would lead to
superior investment results. Amongst his many accomplishments was the
formation of his proprietary stock picking system; the Zacks Rank,
which continues to outperform the market by nearly a 3:1 margin. The
best way to unlock the profitable stock recommendations and market
insights of Zacks Investment Research is through our free daily email
newsletter; Profit from the Pros. In short, it's your steady flow of
Profitable ideas GUARANTEED to be worth your time! Register for your
free subscription to Profit From the Pros by going to
http://at.zacks.com/?id=2565.

Zacks Investment Research is under common control with affiliated
entities (including a broker-dealer and an investment adviser), which
may engage in transactions involving the foregoing securities for the
clients of such affiliates.

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
Charles Rotblut, CFA
312-265-9352
Email: pr@zacks.com
Visit: www.Zacks.com

Copyright Business Wire 2008