CHICAGO, Jan. 30, 2013 /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): Owens & Minor, Inc. (NYSE:OMI) and Family Dollar Stores Inc. (NYSE:FDO). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Impax Laboratories Inc (NASDAQ:IPXL) and Universal Health Services, Inc (NYSE:UHS).
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 OMI and FDO 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:
Owens & Minor, Inc. (NYSE:OMI) announced third-quarter profit of 49 cents per share on October 29 which came behind the Zacks Consensus Estimate by 2 cents. The diluted earnings per share also fell by 7.55% on a year-over-year basis. The Zacks Consensus Estimate for the current year slipped 2 cents per share to $1.90 in the last 60 days. Next year's estimate also dipped 14 cents per share to $1.93 per share in that time span.
Family Dollar Stores Inc. (NYSE:FDO) posted a first -quarter profit of 69 cents per share on January 10, which came in 5 cents wider than the average forecast. The Zacks Consensus Estimate for 2012 fell to a profit of $3.99 per share from $4.25 over the past month with 21 out of 21 covering analysts slashed forecasts. Next year's forecasts slipped 35 cents to $4.47 per share in the same time span.
Here is a synopsis of why IPXL and UHS 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;
Impax Laboratories Inc
(NASDAQ:IPXL) third -quarter profit of 48 cents per share, posted on November 6, and lagged analysts' projections by nearly 4.0%. For 2012, the Zacks Consensus Estimate moved down 2 cents in the last 30 days as 3 out of the 12 covering analysts cut back on forecasts. The forecast for next year slid 64 cents to 83 cents per share in the same time span.
Universal Health Services, Inc (NYSE:UHS) reported a third-quarter profit of 92 cents per share on October 29, that fell 7.07% short of the Zacks Consensus Estimate. The full-year average forecast is currently pegged at $4.08 per share, compared with the last 30 days projection of $4.09. Next year's forecast dropped 1 cent 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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