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): Sears Holding Corp. (NASDAQ: SHLD) and Parker Drilling (NYSE: PKD). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Domino’s Pizza Corp. (NYSE: DPZ) and Schering Plough (NYSE: SGP). 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 129% annually (+5.3% vs. +12.1%). 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 SHLD and PKD 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:
Sears Holding Corp. (NASDAQ: SHLD) shares are trading only marginally lower on the year in spite of the fact that the company is operating in the incredibly challenging discretionary retail environment. But that is not to say that the outlook is all peaches and cream, because within the last 30 days, analyst estimates have been dropping sharply. The current-year estimate was $6.31 only 90 days ago, and now stands at a much diminished $3.58 per share. The consumer environment remains tepid, with no end in sight.
Parker Drilling (NYSE: PKD) is operating in the insanely lucrative energy sector, but this oil driller had been unable to capitalize on the big boom in crude prices, as evidenced by the movement in its stock price over the first few months of the year. Shares of Parker have dropped over 30% of their value as they have dipped lower from over $7.50 to less than $5.00. Estimates continue to move lower, with the current-year estimate dropping by 30% in the last 30 days, sliding from $1.03 to just 73 cents per share.
Here is a synopsis of why DPZ and SGP 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;
Domino’s Pizza Corp. (NYSE: DPZ) makes delicious pizza, but apparently that momentum has not carried over to the income statement, because the company’s stock price has been down-trending for close to the last year on the heels of some very disappointing quarterly results. Domino’s has failed to meet analyst expectations three out of the last four quarters, having missed by a whopping 26% only two quarters ago. As you can imagine, analysts continue to downgrade their forecast, with the current-year estimate dropping 13 cents in the last 30 days and moving to its current projection of $103 per share.
Schering-Plough Corp. (NYSE: SGP) shares have been severely battered in 2008, heading lower from over $26 to their current location of under $20, a sharp loss of close to 25%. This large pharmaceutical producer has had its estimates slashed in the last 60 days as a result of the ever-increasing general weakness in the domestic economy. The current-year estimate has dropped 10 cents, landing at its current projection of $1.50 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 +32.2%. 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 129% annually (+5.3% vs. +12.1%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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