CHICAGO, March 1, 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): Thoratec Corporation (Nasdaq: THOR) and The Advisory Board Company (Nasdaq: ABCO). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Pacific Biosciences of California (Nasdaq: PACB) and HEALTHSOUTH Corp. (NYSE: HLS). To see the full Zacks #5 Rank List - Stocks to Sell Now visit: http://at.zacks.com/?id=92
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 THOR and ABCO 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:
Thoratec Corporation (Nasdaq: THOR) announced fourth -quarter earnings of 25 cents per share on Jan 27 that missed analysts' expectations by 7%. The Zacks Consensus Estimate for the current year slipped 14 cents to $1.23 per share in the last 60 days as all the covering analysts reduced estimates. Next year's estimate dipped 25 cents to $1.37 per share in that time span.
The Advisory Board Company (Nasdaq: ABCO) posted a third-quarter profit of 28 cents per share on Feb 3, which came in 4 cents wider than the average forecast. The diluted earnings per share fell 3 cents to a loss of 24 cents per share on a year- over- tear basis. The Zacks Consensus Estimate for the full year fell to a profit of $1.17 per share from $1.27 over the past month as 5 out of the 6 covering analysts slashed forecasts. For 2012, analysts expect a loss of 14 cents per share, compared to last month's projection for a profit of $1.68 per share.
Here is a synopsis of why PACB and HLS 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;
Pacific Biosciences of California's (Nasdaq: PACB) fourth-quarter loss of 97 cents per share, posted on Feb 15, lagged analysts' projections by nearly 7%. For 2011, the Zacks Consensus Estimate moved down 29 cents to a loss of $2.43 per share in the last 30 days as 4 analysts out of 5 cut back on forecasts. Estimate for next year slid 7 cents to a loss of $1.96 per share during that time period.
HEALTHSOUTH Corp. (NYSE: HLS) reported a fourth-quarter profit of 37 cents per share on Feb 17 that fell 12% short of the Zacks Consensus Estimate. The full-year average forecast is currently $1.23 per share, compared with last week's projection of $1.33. During that time, 12 analysts out of 16 revised downward. Next year's forecast dropped 19 cents to $1.39 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 +27%. 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 (-0.9% versus +9%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
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