Zacks Sell List Highlights: New York Times Co, Ambac Financial Group Inc., Dow Chemical Co. & Chipotle Mexican Grill

Since inception in 1988, the S&P 500 has outperformed the Zacks #5 Rank List -- Stocks to Sell Now by 129% annually (+5.3% vs. +12.1%). 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 NYT and ABK 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:

New York Times Co. (NYSE: NYT | Quote | Chart | News | PowerRating) has been struggling in a very dynamic and competitive landscape. With advertisers continuing to shift their dollars to alternative and more progressive channels, companies operating in the print environment have been experiencing sharp down-turns in revenue. The current-year estimate for HYT is 89 cents, down from $1.02 90 days ago, while the next-year estimate stands at 83 cents.

Ambac Financial Group Inc. (NYSE: ABK | Quote | Chart | News | PowerRating) has taken a serious beating in the current financial and economic climate. The bond insurer has had its earnings estimates slashed by analysts, with the current-year estimate dropping from a loss of $1.91 90 days ago to its current projection of a loss of $8.97. In the meantime, the company's stock price has dropped from over $90 to its current price of less than $2.

Here is a synopsis of why DOW and CMG 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.

Dow Chemical Co. (NYSE: DOW | Quote | Chart | News | PowerRating) has been battling higher prices for both crude and natural gas, two key components in the development of the company's extensive product line. Just today, June 25, Dow announced a second round of price increases in an attempt to pass along its higher costs to its customers, the second such increase in less than a month. Chief executive Andrew Liveris said the conditions are "extremely unwelcome but entirely unavoidable." Dow shares are down a little more than 15% in the last month.

Chipotle Mexican Grill (NYSE: CMG | Quote | Chart | News | PowerRating) shares have dropped from their lofty 2007 year-end highs of over $155 to a more reasonable $90. At these levels, this stock still looks seriously overvalued, carrying a forward P/E multiple of over 33X. As the American consumer struggles with decreased spending power due to the weakening dollar and tighter lending standards, discretionary spending has taken a hit.

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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 +30%. 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 (+5.3% vs. +12.1%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

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