CHICAGO, June 29, 2012 /PRNewswire/ -- 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): Biglari Holdings Inc (NYSE:BH) and Systemax Inc. (NYSE:SYX). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Dr Pepper Snapple Group Inc. (NYSE:DPS) and Leggett & Platt, Inc. (NYSE:LEG) .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 BH and SYX 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:
Biglari Holdings Inc (NYSE:BH) announced second -quarter profit of $3.39 per share on May 18 which came behind the Zacks Consensus Estimate by $1.74. However, the diluted earnings per share fell by 17.32 on a year-over-year basis. The Zacks Consensus Estimate for the current year slipped $3.7 per share to $23.41 in the last 60 days. Next year's estimate also dipped $2.43 per share to $26.57 per share in that time span.
Systemax Inc. (NYSE:SYX) posted a first -quarter profit of 22 cents per share on May 8, which came in 16 cents wider than the average forecast. The Zacks Consensus Estimate for 2012 fell to a profit of $1.28 per share from $1.35 over the past month with 1 out of 2 covering analysts slashing forecasts. Next year's forecasts slipped 16 cents to $1.72 per share in the same time span.
Here is a synopsis of why DPS and LEG 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;
Dr Pepper Snapple Group Inc. (NYSE:DPS) first-quarter profit of 46 cents per share, posted on April 25, lagged analysts projections by nearly 4.17%.For 2012, the Zacks Consensus Estimate moved down 1 cent in the last 30 days as 1 of the 12 covering analysts cut back on forecasts. The forecast for next year slid 1 cent to $3.18 per share in the same time span.
Leggett & Platt, Inc. (NYSE:LEG) reported a first-quarter profit of 30 cents per share on April 26, that fell 6.52% short of the Zacks Consensus Estimate. The full-year average forecast is currently pegged at $1.31 per share, compared with the projection of $1.32 in 60 days ago. Next year's forecast dropped 2 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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