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): Knight Transportation (NYSE: KNX) and The Advisory Board Company (Nasdaq: ALEX). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Landauer, Inc. (Nasdaq: LDR) and Harbin Electric, Inc. (Nasdaq: KRBN). 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 KNX and ALEX 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:
Knight Transportation (NYSE: KNX) announced first -quarter earnings of 12 cents per share on April 20 that missed analysts’ expectations by 29%. This apart the earnings missed the previous year’s earnings results by 3 cents. The Zacks Consensus Estimate for the current year slipped 7 cents to 82 cents per share in the last 30 days as 21 out of the 25 covering analysts reduced estimates. Next year’s estimate dipped 6 cents to $1.02 per share in that time span.
The Advisory Board Company (Nasdaq: ALEX) posted a first-quarter profit of 20 cents per share yesterday, which came in 24 cents wider than the average forecast. The diluted earnings per share fell 7 cents to a profit of 3 cents on March 2011 as compared to results of March 2010. The Zacks Consensus Estimate for the full year fell 22 cents to a profit of $1.76 per share from $1.98 over the past couple of months. For 2012, analysts expect a profit of $2.41 per share, compared to projections of a profit of $2.46 per share in a span of 60 days.
Here is a synopsis of why LDR and HRBN 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;
Landauer, Inc.‘s (Nasdaq: LDR) second-quarter profit of 63 cents per share, posted on May 3, lagged analysts’ projections by nearly 6%. For 2011, the Zacks Consensus Estimate moved down a penny to a profit of $2.69 per share in the last 7 days as 1analyst out of 3 cut back on forecasts. Estimate for next year slid 6 cents to a profit of $2.96 per share during that time period.
Harbin Electric, Inc. (Nasdaq: KRBN) reported a fourth-quarter profit of 50 cents per share on March 16 that fell 17% short of the Zacks Consensus Estimate. The full-year average forecast is currently $3.02 per share, compared to projections of $3.04 made 60 days back. Next year’s forecast dropped 1 cent to $3.52 per share in the same period.
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.
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