CHICAGO, Aug. 23, 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): Matthews International Corp (NASDAQ:MATW) and NIKE, Inc. (NYSE:NKE).Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: GlaxoSmithKline plc (NYSE:GSK) and BorgWarner Inc. (NYSE:BWA).
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 MATW and NKE 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:
Matthews International Corp (NASDAQ:MATW) announced third -quarter profit of 60 cents per share on July 19 which came behind the Zacks Consensus Estimate by 17 cents. The diluted earnings per share also fell by 16.67% on a year-over-year basis. The Zacks Consensus Estimate for the current year slipped 17 cents per share to $2.34 in the last 60 days. Next year's estimate also dipped 29 cents per share to $2.52 per share in the same time span.
NIKE, Inc. (NYSE:NKE) announced fourth -quarter profit of $1.17 per share on June 28 which came behind the Zacks Consensus Estimate by 20 cents.The Zacks Consensus Estimate for the current year slipped 64 cents per share to $5.13 in the last 60 days. Next year's estimate also dipped 29 cents per share to $5.85 per share in the same time span.
Here is a synopsis of why GSK and BWA 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;
GlaxoSmithKline plc (NYSE:GSK) second-quarter profit of 82 cents per share, posted on July 25, lagged analysts projections by nearly 2.38%. For 2012, the Zacks Consensus Estimate moved down 9 cent in the last 30 days as 7 out of the 8 covering analysts cut back on forecasts. The forecast for next year slid 10 cents to $4.01 per share in the same time span.
BorgWarner Inc. (NYSE:BWA) reported a second-quarter profit of $1.36 per share on July 26, that fell 0.73% short of the Zacks Consensus Estimate. The full-year average forecast is currently pegged at $5.13 per share, compared with the last 30 days projection of $5.36. Next year's forecast dropped 64 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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