Zacks Sell List Highlights: Washington Mutual Inc, Lear Corp, Trimeris Inc, Ford Motor Co.

Since inception in 1988, the S&P 500 has outperformed the Zacks #5 Rank List -- Stocks to Sell Now by 81% annually (+2% versus +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 WM and LEA 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:

Washington Mutual Inc.'s (NYSE: WM). Share price has continued to trade lower in reaction to sustained weakness in the housing market. WaMu's second-quarter loss of $3.34 per share was significantly above expectations. The company's credit portfolio and residential portfolio's are a source of concern for investors. Management is forecasting loss provisions to peak in 2008, leading analysts to set full-year loss estimates at $5.79 per share, down from $3.11 per share a share, earlier.

Lear Corp. (NYSE:LEA) reported an 85% drop in second-quarter earnings on lower demand and pricing pressures in North America. The maker of automotive seats also trimmed its 2008 adjusted pretax profit forecast to $550 million to $600 million from its prior expectation of $600 million to $640 million. Net sales guidance was lowered to $15 billion down from $15.3 billion. Management does not expect industry conditions to improve in the near term, and anticipates conditions worsening. Analysts have cut their full-year EPS expectations by about a dollar to $2.83 per share.

Here is a synopsis of why TRMS and F 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;

Trimeris Inc.'s (NASDAQ: TRMS | Quote | Chart | News | PowerRating) second-quarter profit fell 87%, largely due to waning sales of its AIDS drug Fuzeon and a large restructuring charge. Quarterly revenue was $4.7 million, about half the amount generated last year. Shares recently sank more than 16%, and currently trading near their 10-year low. Analysts have switched their neutral stance to a bearish view on the stock and slashed their 2008 EPS forecast by almost half, to $0.36. Speculation has it that the troubled company is up for sale but is yet to attract takers.

Ford Motor Co (NYSE: F | Quote | Chart | News | PowerRating) posted an $8.7 billion second-quarter net loss, as higher gas prices continues to effect demand for large trucks and SUVs. U.S. sales recently fell to a 16-year low, and automakers continue to struggle amidst tight credit markets. Earlier this year, Ford abandoned a longstanding goal of returning to profitability in 2009 and said it does not expect an economic turnaround until 2010. The company has a large inventory, which leads to weak pricing, while liquidity issues remain a concern. In the last seven days, analysts have dropped their 2008 forecast by 5 cents to $1.79 per share.

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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 81% annually (+2% versus +11%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

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