CHICAGO, Sept. 30, 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): McDermott International (NYSE: MDR) and Talisman Energy Inc. (NYSE: TLM). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Illinois Tool Works Inc. (NYSE: ITW) and Briggs & Stratton Corporation (NYSE: BGG).
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 MDR and TLM 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:
McDermott International (NYSE: MDR) announced second-quarter profit of 27 cents per share on August 3 that missed analysts' expectations by 15.62%. The Zacks Consensus Estimate for the current year slid to $1.19 per share from $1.29 per share in the last 60 days as next year's estimate dipped 10 cents per share to $1.55 per share in that time span.
Talisman Energy Inc. (NYSE: TLM) posted a second-quarter profit of 16 cents per share on July 28, which came in 17 cents wider than the average forecast. The Zacks Consensus Estimate for the full year fell to 85 cents per share from 93 cents per share over the past month. For 2012, analysts expect a profit of $1.45 per share, compared to last month's projection for a profit of $1.54 per share.
Here is a synopsis of why ITW and BGG 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;
Illinois Tool Works Inc. (NYSE: ITW) second-quarter profit of 96 cents per share, posted on July 26, lagged analysts' projections by 5.88%. Estimate for current year slid 1 cent per share to $3.78 per share over a month as next year's estimate dipped 10 cents per share to $4.28 per share in that time span.
Briggs & Stratton Corporation (NYSE: BGG) reported a fourth-quarter profit of 32 cents per share on August 11 that fell 21.95% short of the Zacks Consensus Estimate. The full-year average forecast is currently $1.20 per share, compared with last two month's projection of $1.54 per share. Next year's forecast dropped to $1.47 per share from $1.68 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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