CHICAGO, Aug. 22, 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): J.C. Penney Company, Inc. (NYSE:JCP) and PriceSmart, Inc. (NASDAQ:PSMT).Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Avon Products, Inc. (NYSE:AVP) and Monro Muffler Brake Inc (NASDAQ:MNRO).
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 JCP and PSMT 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 second -quarter loss of 37 cents per share on August 10 which came behind the Zacks Consensus Estimate by 13 cent. The diluted earnings per share also fell by 628.57% on a year-over-year basis. The Zacks Consensus Estimate for the current year slipped $1.13 per share to 19 cents in the last 30 days. Next year's estimate also dipped 79 cents per share to $1.63 per share in the same time span.
PriceSmart, Inc. (NASDAQ:PSMT) posted a third -quarter profit of 52 cents per share on July 11, which came in 8 cent wider than the average forecast. The Zacks Consensus Estimate for 2012 fell to $2.22 per share from $2.29 over the past month with 2 out of 4 covering analysts slashed forecasts. Next year's forecasts slipped 4 cents to $2.74 per share in the same time span.
Here is a synopsis of why AVP and MNRO 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;
Avon Products, Inc. (NYSE:AVP) second-quarter profit of 20 cents per share, posted on August 01, lagged analysts projections by nearly 4.76%. For 2012, the Zacks Consensus Estimate moved down 9 cents in the last 30 days as 9 out of the 13 covering analysts cut back on forecasts. The forecast for next year slid 13 cents to $1.03 per share in the same time span.
Monro Muffler Brake Inc (NASDAQ:MNRO) reported a first-quarter profit of 36 cents per share on July 26, that fell 5.26% short of the Zacks Consensus Estimate. The full-year average forecast is currently pegged at $1.56 per share, compared with the last 30 days projection of $1.74. Next year's forecast dropped 7 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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