Mar. 18, 2010 (Business Wire) -- 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): TransAlta Corp. (NYSE: TAC) and Tower Group, Inc. (Nasdaq: TWGP). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Allos Therapeutics, Inc. (Nasdaq: ALTH) and Calumet Specialty Products Partners, L.P (Nasdaq: CLMT). 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 TAC and TWGP 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:
TransAlta Corp. (NYSE: TAC) reported earnings of 38 cents per share in its fourth quarter on Feb 24, which came in 20% behind analysts’ expectations. Earnings fell 5% year over year. The Zacks Consensus Estimate for 2010 slid 22 cents to $1.18 per share over the past month as all of the 4 covering analysts cut estimates. Next year’s forecast declined 23 cents to $1.27 per share in the same period.
Tower Group, Inc. (Nasdaq: TWGP) recently cut its operating earnings outlook for the full year to between $3 and $3.20 per share from $3.50 to $3.70. Four analysts out of 6 lowered estimates in the last 30 days, sending the average forecast down 44 cents to a profit of $3.08 per share. On Mar 1, the property and casualty insurer had posted fourth-quarter earnings of 74 cents per share that missed the Zacks Consensus Estimate by nearly 15%.
Here is a synopsis of why ALTH and CLMT 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;
Allos Therapeutics, Inc.’s (Nasdaq: ALTH) fourth-quarter loss of 22 cents per share, reported on Mar 1, came in 2 cents wider than analysts’ projections. The Zacks Consensus Estimate for 2010 widened to a loss of 73 cents per share from 40 cents in the last 30 days as 9 out of 10 analysts revised downward. Estimate for the next year is pegged at a loss of 12 cents per share, which moved down from a profit of 20 cents over the same period.
Calumet Specialty Products Partners, L.P (Nasdaq: CLMT) saw a 56% year-over-year slump in fourth-quarter earnings on the back of higher crude prices. On Feb 17, the company reported quarterly earnings of 24 cents per share while analysts expected 28 cents. Sales dipped slightly to $495.9 million from $498.7 million a year ago. For the full year, the Zacks Consensus Estimate slipped 10 cents to a profit of $1.94 per share in the last month, reflecting cuts by 1 analyst out of 2.
Truly taking advantage of the Zacks Rank requires the understanding of how it works. The free special report; “Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions” is available to provide this insightful background. Download a free copy now to prosper in the years to come at http://at.zacks.com/?id=93
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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