CHICAGO, Aug. 16, 2011 /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): DG FastChannel Inc. (Nasdaq: DGIT) and Royal Caribbean Cruises Ltd. (NYSE: RCL). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Fresh Del Monte Produce Inc. (NYSE: FDP) and Snyder S Lance Inc. (Nasdaq: LNCE).
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 DGIT and RCL 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:
DG FastChannel Inc. (Nasdaq: DGIT) announced second-quarter profit of 48 cents per share on August 2 that missed analysts' expectations by 7.69%. The Zacks Consensus Estimate for the current year slipped to $1.61 per share from $2.21 per share in the last 30 days as next year's estimate dipped 87 cents per share to $1.82 per share in that time span.
Royal Caribbean Cruises Ltd. (NYSE: RCL) posted a second-quarter profit of 43 cents per share on July 28, which came in 1 cents wider than the average forecast. The Zacks Consensus Estimate for the full year fell to $2.90 per share from $3.16 per share over the past month. For 2012, analysts expect a profit of $3.33 per share, compared to last month's projection for a profit of $3.72 per share.
Here is a synopsis of why FDP and LNCE 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;
Fresh Del Monte Produce Inc. (NYSE: FDP) second-quarter profit of 77 cents per share, posted on August 2, lagged analysts' projections by 18.09%. Estimate for current year slid 46 cents per share to $2.15 per share over a month as next year's estimate dipped 20 cents per share to $2.63 per share in that time span.
Snyder S Lance Inc. (Nasdaq: LNCE) reported a second-quarter profit of 16 cents per share on August 9 that fell 11.11% short of the Zacks Consensus Estimate. The full-year average forecast is currently $0.82 per share, compared with last month's projection of $0.95 per share. Next year's forecast dropped to $1.23 per share from $1.26 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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