CHICAGO, June 15, 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): H&R Block, Inc. (NYSE:HRB) and Brookdale Senior Living, Inc. (NYSE:BKD). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Caesars Entertainment Corp. (Nasdaq:CZR) and Home Inns & Hotels Management Inc. (Nasdaq:HMIN)
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 HRB and BKD 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:
H&R Block, Inc. (NYSE:HRB) announced a third-quarter loss of 1 cent per share on March 7 against analysts' expectations that the company would post a profit of 6 cents per share. Moreover the diluted earnings per share fell by 116.67% on a year-over-year basis. The Zacks Consensus Estimate for the current year slipped 17 cents per share to $1.21 in the last 60 days. Next year's estimate also dipped 10 cents per share to $1.54 per share in that time span.
Brookdale Senior Living, Inc. (NYSE:BKD) posted a first-quarter loss of 5 cents per share on May 2, which came in 4 cents wider than the average forecast. The diluted earnings per share fell 400% as compared to results of 2011. The Zacks Consensus Estimate for 2012 fell to a loss of 2 cents per share from a profit of 7 cents over the past two months. Next year's forecasts slipped 5 cents to 20 cents per share in the same time span.
Here is a synopsis of why CZR and HMIN 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;
Caesars Entertainment Corp. (Nasdaq:CZR) reported a first-quarter loss of $2.24 per share on May 1, which lagged analysts' projections by nearly 126.26%. For 2012, the Zacks Consensus Estimate moved down from a loss of $4.75 by 80 cents over the last 30 days. The forecast for next year slipped 47 cents to a loss of $3.78 per share in the same time span.
Home Inns & Hotels Management Inc. (Nasdaq:HMIN) reported a first-quarter loss of 16 cents per share on May 10, that fell 100% short of the Zacks Consensus Estimate. The full-year average forecast is currently pegged at 45 cents per share, compared with the projection of 65 cents 60 days ago. Next year's forecast dropped by 35 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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