Zacks.com releases details on a group of stocks that are currently members of the exclusive Zacks #5 Rank List – Stocks to Sell Now. These stocks are currently rated as a Zacks Rank #5 (Strong Sell): The Boston Beer Company, Inc. (NYSE: SAM) and Central European Distribution Corp (Nasdaq: CEDC). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: United States Steel Corporation (NYSE: X) and Stepan Company (NYSE: SCL). To see the full Zacks #5 Rank List – Stocks to Sell Now visit: http://at.zacks.com/?id=92
Since inception in 1988, the S&P 500 has outperformed the Zacks #5 Rank List of Stocks to Sell Now by 80% annually (+2% vs. +10%). While the rest of Wall Street continued to tout stocks during the market declines of the last few years, Zacks told investors which stocks to sell or avoid.
Here is a synopsis of why SAM and CEDC have a Zacks Rank of #5 (Strong Sell) and should most likely be sold or avoided for the next one to three months. Note that a #5 Strong Sell rating is applied to 5% of all the stocks in the Zacks Rank universe:
The Boston Beer Company, Inc. (NYSE: SAM) reported first-quarter earnings of 28 cents per share on May 4, which came in nearly 38% short of analysts’ expectations. The Zacks Consensus Estimate for the current year decreased 23 cents to a profit of $2.59 over the past week as 3 analysts out of 4 revised downwards. Next year’s forecast fell 20 cents to $4.21 per share during that period.
Central European Distribution Corp‘s (Nasdaq: CEDC) first-quarter loss of 24 cents per share, announced earlier this month, lagged the Zacks Consensus Estimate by 140%. The Zacks Consensus Estimate for 2010 dropped 4 cents to a profit of $1.04 per share in the last week, which reflected reductions by 1 analyst out of 5. A month ago, the average forecast was pegged at $1.18 per share.
Here is a synopsis of why X and SCL have a Zacks Rank of 4 (Sell) and should also most likely be sold or avoided for the next one to three months. Note that a #4 Sell rating is applied to 15% of all the stocks ranked by Zacks;
United States Steel Corporation (NYSE: X) posted a first-quarter loss of 60 cents per share on Apr 26, which missed the Zacks Consensus Estimate by 22 cents. The full-year average dipped 1.32 to $2.80 per share from $4.12 in the last 30 days as 8 analysts out of 10 slashed estimates.
Stepan Company’s (NYSE: SCL) first-quarter profit of $1.63 per share, reported earnier this month, was 31 cents worse than analysts’ projections. The Zacks Consensus Estimate for 2011 stands at a profit of $7.04 per share, 3 cents less than last month’s forecast as one out of the 2 covering analysts pulled back on expectations. Estimate for the following year fell a penny to a profit of $7.28 per share in that time span.
Truly taking advantage of the Zacks Rank requires the understanding of how it works. The free special report; “Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions” is available to provide this insightful background. Download a free copy now to prosper in the years to come at http://at.zacks.com/?id=93
About the Zacks Rank
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 +28%. 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 significantly underperformed the S&P 500 (2.8% versus +9.7%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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