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): True Religion Apparel Inc. (NASDAQ: TRLG) and Haverty Furniture Companies Inc. (NYSE: HVT). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: NTL Inc. (NASDAQ: NTLI) and Triad Hospitals Inc. (NYSE: TRI). 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 143.6% annually (11.8% vs. 4.8% respectively). 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 TRLG and HVT 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:
True Religion Apparel Inc. (NASDAQ: TRLG) has seen next year’s earnings estimates drop 14 cents per share over the past week. The current consensus estimate is $1.12 per share. The company last week reported both third-quarter results and 2006 guidance that missed Wall Street expectations.
Haverty Furniture Companies Inc. (NYSE: HVT) has experienced a drop in analyst estimates. Earnings estimates for this year stand 74 cents per share, down 18 cents from 30 days ago. The company said October same-store sales dropped 10.1%. Same-store sales, or sales at locations open at least one year, is a widely used industry gauge of performance. Total sales in October fell 7.6% to $63.5 million.
Here is a synopsis of why NTLI and TRI 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:
NTL Inc. (NASDAQ: NTLI) has been the target of increasing bearishness by analysts. Over the past three months, this year’s estimates have declined 53 cents per share. The new consensus estimate calls for a loss of $2.41 per share this year. The company posted a wider third-quarter loss as costs and restructuring expenses pulled down earnings.
Triad Hospitals Inc. (NYSE: TRI) has seen its earnings estimates drop for this year. The current 2006 consensus estimate of $2.51 per share is 38 cents below the forecast of a month ago. The company said its third-quarter profit slipped 14% due to increased debt on unpaid accounts and a stock-based compensation charge.
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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.” A $10,000 investment in the Zacks Rank list made in 1988 would now be worth $1.77 million – equivalent to a 31.8% annualized return! 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 143.6% annually (+4.8% vs. +11.8%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
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