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Since inception in 1988, the S&P 500 has outperformed the Zacks #5 Rank List of Stocks to Sell Now by 81% annually (+2% vs. +11%). 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 WL and AXL 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:
Wilmington Trust Corp (NYSE: WL | Quote | Chart | News | PowerRating) posted a big loss in its second quarter, hurt by impairment charges, higher loan loss provisions and tighter margins. The company's sales and income growth rates are significantly below industry levels. In the last three months, Wall Street earnings estimate for fiscal 2008 has been reduced to $1.95 from $2.46 per share. On a price-to-book basis, the shares currently trade at 29 percent premium to the peer median, versus a 47 percent premium earlier.
American Axle & Manufacturing Holdings Inc (NYSE: AXL | Quote | Chart | News | PowerRating) continues to be effected by weak SUV demand in the US. High commodity costs and pricing pressure remain a source of concern for the company, which has had a hard time passing along higher costs to OEM customers. The realignment of manufacturing facilities and the recently ratified four-year agreement with United Auto Workers are expected to incur additional costs to American Axle of $400-$450 million. Analysts are now forecasting a fiscal 2008 loss of $1.84 per share, down from the previous projection of a gain of 39 cents per share.
Here is a synopsis of why LINTA and NSTC 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;
Liberty Media Corp's (NASDAQ: LINTA | Quote | Chart | News | PowerRating) Vongo did not receive the media attention its dot-com-savvy peers did, but it was certainly a pioneer in movie-downloading service. The collapse of this unit is a loss for the company, which has been suffering from the economic downturn. The slowdown is expected to continue to stifle Liberty's earnings growth well into 2009. As it stands, this stock looks overvalued, trading with a high P/E multiple.
Ness Technologies Inc (NASDAQ: NSTC | Quote | Chart | News | PowerRating) is facing intense competition from large players in the IT industry and the pressure of currency exchange rate fluctuations. The company, which has a high level of exposure to its politically unstable domestic market in Israel, expects to face headwinds from various macroeconomic business challenges, extreme pricing pressure and the weak U.S. dollar in 2008. The company reported disappointing results for the first three quarters of 2007, prompting the company to lower its annual guidance twice. Analysts are projecting the company to report earnings of $1.02 in the current fiscal year.
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 +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 81% annually (+2% vs. +11%). 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.
Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of Zacks Rank Buy stocks and highlights those stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=94.
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 to 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 at http://at.zacks.com/?id=95.
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.
SOURCE: Zacks.com
Zacks.com Michael Vodicka Phone: 312-265-9226 Email: pr@zacks.com Visit: www.Zacks.com
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