CHICAGO, Sept. 21, 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): TCF Financial Corporation (NYSE: TCB) and First Financial Bancorp (Nasdaq: FFBC). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Brady Corporation (NYSE: BRC) and Alcoa Inc. (NYSE: AA).
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 TCB and FFBC 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:
TCF Financial Corporation (NYSE: TCB) announced second-quarter profit of 19 cents per share on July 21 that missed analysts' expectations by 9.52%. The Zacks Consensus Estimate for the current year slid to 78 cents per share from 79 cents per share in the last 30 days as next year's estimate dipped 4 cents per share to $1 per share in that time span.
First Financial Bancorp (Nasdaq: FFBC) posted a second-quarter profit of 27 cents per share on July 28, which came in 3 cent wider than the average forecast. The Zacks Consensus Estimate for the full year fell to of $1.13 per share from $1.20 per share over the past two months. For 2012, analysts expect a profit of $1.30 per share, compared to last two month's projection for a profit of $1.38 per share.
Here is a synopsis of why BRC and AA 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;
Brady Corporation (NYSE: BRC) fourth-quarter profit of 58 cents per share, posted on September 12, lagged analysts' projections by 3.33%. Estimate for current year slid 11 cents per share to $2.39 per share over a month as next year's estimate dipped 12 cents per share to $2.68 per share in that time span.
Alcoa Inc. (NYSE: AA) reported a second-quarter profit of 32 cents per share on July 11 that fell 5.88% short of the Zacks Consensus Estimate. The full-year average forecast is currently $1.20 per share, compared with last month's projection of $1.24 per share. Next year's forecast dropped to $1.38 per share from $1.45 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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