CHICAGO, Feb. 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): J.C. Penney Company, Inc. (NYSE: JCP) and MeadWestvaco Corp. (NYSE: MWV). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Royal Gold, Inc (NASDAQ: RGLD) and Regis Corporation (NYSE: RGS).
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 JCP and MWV 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:
J.C. Penney Company, Inc. (NYSE: JCP) announced third-quarter loss of 93 cents per share on November 12 which came behind the Zacks Consensus Estimate by 85 cents. The diluted earnings per share also fell by 616.67% on a year-over-year basis. The Zacks Consensus Estimate for the current year slipped 18 cents per share to $1.48 in the last 30 days. Next year's estimate also dipped 36 cents per share to a loss of 41 cents per share in that time span.
MeadWestvaco Corp. (NYSE: MWV) posted a first -quarter profit of 7 cents per share on January 30, which came in 12 cents wider than the average forecast. The Zacks Consensus Estimate for 2013 fell to a profit of $1.69 per share from $1.77 over the past month with 7 out of 11 covering analysts slashed forecasts. Next year's forecasts slipped 8 cents to $2.05 per share in the same time span.
Here is a synopsis of why RGLD and RGS 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;
Royal Gold, Inc (NASDAQ: RGLD) second -quarter profit of 42 cents per share, posted on January 31, and lagged analysts' projections by nearly 4.55%. For 2012, the Zacks Consensus Estimate moved down 11 cents in the last 30 days as 4 out of the 4 covering analysts cut back on forecasts. The forecast for next year slid 27 cents to $2.66 per share in the same time span.
Regis Corporation (NYSE: RGS) reported a second-quarter profit of 3 cents per share on January 31, that fell 76.92% short of the Zacks Consensus Estimate. The full-year average forecast is currently pegged at 53 cents per share, compared with the last 30 days projection of 68 cents. Next year's forecast dropped 13 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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SOURCE Zacks Investment Research, Inc.