CHICAGO - (Business Wire) 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): California Water Service Group (NYSE: CWT) and Telefonos de Mexico, S.A. (NYSE: TMX). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: PepsiAmericas, Inc. (NYSE: PAS) and Boyd Gaming Corporation (NYSE: BYD). 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 of Stocks to Sell Now by 80% annually (+2% vs. +10%). 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 CWT and TMX 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:
California Water Service Group (NYSE: CWT) reported third-quarter earnings per share of 94 cents on Oct 28, 11 cents short of the Zacks Consensus Estimate. The full-year average forecast dropped to $1.99 per share from $2.10 in the last 7 days after 6 out of 8 analysts reduced expectations. Next year’s estimate slipped to $2.11 per share from $2.17 in the same period.
Telefonos de Mexico, S.A. (NYSE: TMX) recorded a 61% year-over-year decline in third-quarter profit. On Oct 21, the company reported quarterly earnings 39 cents per share, 4 cents behind analysts’ projections. The Zacks Consensus Estimate for 2009 is currently $1.66 per share, which declined by a couple of cents over the last month. Two analysts out of 8 cut back on estimates during that time.
Here is a synopsis of why PAS and BYD 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;
PepsiAmericas, Inc. (NYSE: PAS) now sees full-year earnings of $1.83 to $1.87, down from its earlier projection of $1.87 to $1.94. The Zacks Consensus Estimate now stands at $1.86 per share. PepsiAmericas posted a third-quarter profit of 59 cents per share last month that missed analysts’ expectations by 3 cents. The quarter saw a 15% fall in net sales to $1.13 billion.
Boyd Gaming Corporation’s (NYSE: BYD) third-quarter earnings per share of 9 cents, reported on Oct 27, marked a 44% decrease on a year-over-year basis. Earnings also missed analysts’ projections by 18%. Net revenues fell 6.6% to $398.2 million. The Zacks Consensus Estimate for the current year is down to 41 cents per share from 44 cents over the past week, which reflected reductions by 6 analysts out of 13.
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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 +27%. 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 significantly underperformed the S&P 500 (-0.9% versus +9%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
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