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Zacks Sell List Highlights: International Game Technology, Lear, Bemis, and Foundry Networks
29 April 2005
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): International Game Technology (NYSE:IGT - News) and Lear Corporation (NYSE:LEA - News). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Bemis Company, Inc. (NYSE:BMS - News) and Foundry Networks, Inc. (NASDAQ:FDRY - News). 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 -- Stocks to Sell Now by 155.5% annually (11.9% vs. 4.6% respectively). 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 IGT and LEA 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 Zacks ranked stocks:
International Game Technology (NYSE:IGT - News) missed fiscal second-quarter estimates by a penny with earnings of 30 cents per share; the earnings number excludes the impact of certain restructuring charges. In response to the report, analysts revised their expectations for IGT's fiscal second-half downward. Third and fourth-quarter profits have been lowered by 11% and 8%, respectively. Full-year earnings estimates have declined by seven cents, or 5%, to $1.26 per share.
Lear Corporation (NYSE:LEA - News) missed the consensus expectation for the third consecutive quarter. Last week, the company reported a first-quarter loss of three cents per share, excluding an one-time tax benefit; analysts were anticipating a profit of seven cents. Revenues decreased to $4.3 billion from $4.5 billion a year prior because of an unfavorable vehicle platform mix and lower industry production in Lear's major markets. Exclusive of the tax benefit, the company's latest guidance calls for full-year per share earnings of $2.49-$3.11. The consensus estimate for 2005 profits has been slashed by 52 cents to $3.30 per share - 42% below where it was three months ago.
Here is a synopsis of why BMS and FDRY 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:
Bemis Company, Inc. (NYSE:BMS - News) matched first quarter earnings expectations last week with profits of 30 cents per share. The company, however, reduced guidance for the second quarter and the full year to reflect its inability to pass along higher material costs to customers. Bemis anticipates second-quarter earnings per share of 42 cents. The company expects full year profits to be "slightly ahead" of 2004 profits. Following the release of BMS' revised guidance, analysts lowered their full-year expectations by 5.5%, to $1.71 per share, from a week prior.
Foundry Networks, Inc. (NASDAQ:FDRY - News) recently suspended giving revenue and earnings guidance, citing "reduced visibility" and "unexpected sluggishness" in IT spending. Following this announcement, analysts adjusted their estimates downward, lowering forecasts for both the second quarter and the full year. The current full-year earnings estimate of 32 cents per share is 15 cents, or 32%, below the level of just 30 days ago.
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
For over 17 years, 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 +32.8%. 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 underperformed the S&P 500 by 155.5% annually (+4.6% vs. +11.9%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
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Source: Zacks.com
Source: Business Wire
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