Zacks Sell List Highlights: Sepracor, CRA International, Owens-Illinois and Ciena Corp.

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 SEPR and CRAI 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:

Sepracor, Inc.'s (NASDAQ: SEPR | Quote | Chart | News | PowerRating) business fundamentals have been mixed over the past several quarters. After reporting second-quarter results that missed Analyst estimates on higher costs, the company cut its full-year revenue guidance. Sales of asthma drug Xopenex have suffered due to lower reimbursement rates from the Medicare program. The performance of the stock is largely dependent on insomnia drug Lunesta. But with generic pressure likely to ramp up in the next few years, Sepracor will be challenged to grow its sales of Lunesta in the U.S.

CRA International, Inc. (NASDAQ: CRAI | Quote | Chart | News | PowerRating) recently posted a 51% drop in third-quarter earnings, hurt by lower revenue from its U.S. finance litigation arm. Though consulting firms were expected to benefit from rising demand for advisory services in the ongoing financial crisis, CRAI has missed expectations twice in the last three quarters. Near term, operational challenges are likely to apply additional pressure. In the last seven days, analysts have slashed their 2008 profit forecast by 45 cents to $2.01 per share.

Here is a synopsis of why OI and CIEN 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;

Owens-Illinois, Inc. (NYSE: OI | Quote | Chart | News | PowerRating) recently cut its 2008 free cash flow guidance on soft demand in both the United States and Europe. The strengthening of the dollar versus the Euro and Australian Dollar is also expected to dampen gains from currency translations. The maker of bottles used for packaging now sees free cash flow of $332 million to $400 million, down from its prior estimate of $500 million for the year. Analysts have reduced their EPS forecast for the company to $3.98 from $4.46 for 2008.

Ciena Corp.'s (NASDAQ: CIEN | Quote | Chart | News | PowerRating) reported a 59% drop in third-quarter profit and guided lower on its annual sales growth, as its major customers delayed orders to reconsider capital spending plans in a turbulent economy. The communications equipment maker now sees revenue growing by about 17% to 20%, down from the previous 27%. Ciena's operating margins have dropped over 250 basis points in the past 12 months. Analysts have cut their estimates by 36 cents and expect the company to report a profit of 98 cents per share in fiscal 2008.

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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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