CHICAGO, April 5, 2013 /PRNewswire/ -- Zacks.com releases details on a group of stocks that are currently members of the exclusive Zacks Rank #5 List – Stocks to Sell Now. These stocks are currently rated as a Zacks Rank #5 (Strong Sell): Polypore International, Inc. (NYSE: PPO) and Ternium S.A. (NYSE: TX). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Churchill Downs, Inc. (NASDAQ: CHDN) and Rockwood Holdings, Inc. (NYSE: ROC).
Since inception in 1988, the S&P 500 has outperformed the Zacks Rank #5 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 PPO and TX 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:
Polypore International, Inc. (NYSE: PPO) announced fourth-quarter profit of 33 cents per share on February 20 which came behind the Zacks Consensus Estimate by 13 cents. The diluted earnings per share also fell by 38.89% on a year-over-year basis. The Zacks Consensus Estimate for the current year slipped 39 cents per share to $1.69 in the last 60 days. Next year's estimate also dipped 52 cents per share to $2.21 per share in that time span.
Ternium S.A. (NYSE: TX) posted a fourth -quarter loss of $1.29 per share on February 20, which came in $1.72 wider than the average forecast. The Zacks Consensus Estimate for 2013 fell to a profit of $2.57 per share from $2.87 over the past two months with 2 out of 5 covering analysts slashed forecasts. Next year's forecasts slipped 13 cents to $2.97 per share in the same time span.
Here is a synopsis of why CHDN and ROC 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;
Churchill Downs, Inc. (NASDAQ: CHDN) fourth-quarter profit of 14 cents per share, posted on March 11, and lagged analysts' projections by nearly 26.3%. For 2013, the Zacks Consensus Estimate moved down 47 cents to $3.25 in the last 30 days as 2 out of the 2 covering analysts cut back on forecasts. The forecast for next year slid 60 cents to $3.75 per share in the same time span.
Rockwood Holdings, Inc. (NYSE: ROC) reported a fourth-quarter profit of 45 cents per share on February 28, that fell nearly 6.3% short of the Zacks Consensus Estimate. The full-year average forecast is currently pegged at $3.78 per share, compared with the last 60 days projection of $3.86. Next year's forecast dropped 12 cents per share in the same period.
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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 +28%. 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 (2.8% versus +9.7%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
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