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): Hershey Co. (NYSE: HSY) and Tronox Inc. (NYSE: TRX). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Jones Soda Co. (NASDAQ: JSDA) and Nautilus Inc. (NYSE: NLS). 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 — Stocks to Sell Now by 132% annually (+5.1% vs. +11.9%). 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 HSY and TRX 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:
Hershey Co. (NYSE: HSY) has seen 2007 earnings estimates drop 21 cents over the past week. Estimates now stand at $2.25 per share. In mid-July, the nation's largest candymaker said profit dropped 96% during the quarter because of costs to transform production lines and lift flat sales.
Tronox Inc. (NYSE: TRX) has experienced a drop in analyst estimates. Earnings estimates for this year stand at a loss of 26 cents per share, down 16 cents from a month ago. said recently that it will take several second quarter charges for various issues.
Here is a synopsis of why JSDA and NLS 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:
Jones Soda Co. (NASDAQ: JSDA) has seen its 2007 estimates fall over 10% to 17 cents per share over the past month. In June, the shares took a hit after coffee chain Starbucks Corp. said it would stop selling the company's drinks. The company missed earnings expectations by 100% in its latest quarter.
Nautilus Inc. (NYSE: NLS) saw its 2007 estimates plunge 89 cents over the past week. Estimates now stand at a loss of three cents per share. The company reported weak second-quarter earnings and an analyst said results might not improve in the second half of the year.
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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 +31.9%. 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 132% annually (+5.1% vs. +11.9%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
Zacks Rank performance is the total return (price changes + dividends) of equal weighted portfolios, consisting of those stocks with the indicated Zacks Rank, assuming zero transaction costs. These returns are not the result of a backtest; these are actual returns since 1988. The stocks in the Zacks Rank portfolios were available to Zacks clients before the beginning of each month (monthly rebalancing). Performance results from 1988 through September 2006 are based on a subset of all Zacks Rank stocks that excludes stocks covered by only one analyst and ADR’s.
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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
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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.
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