Zacks Sell List Highlights: Southwestern Energy, UniSource Energy, Royal Gold and Vale
CHICAGO, March 5, 2012 /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): Southwestern Energy Company (NYSE: SWN) and UniSource Energy Corp. (NYSE: UNS). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Royal Gold, Inc. (Nasdaq: RGLD) and Vale (NYSE: VALE).
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 SWN and UNS 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:
Southwestern Energy Company (NYSE: SWN) announced fourth-quarter profit of 45 cents per share on February 27 that missed analysts’ expectations by 6.25%. The Zacks Consensus Estimate for the current year slid to $1.58 per share from $1.77 per share in the last 30 days as next year’s estimate dipped 22 cents per share to $1.82 per share in that time span.
UniSource Energy Corp. (NYSE: UNS) posted a fourth-quarter profit of 22 cents per share on February 27, which came in 4 cents wider than the average forecast. The Zacks Consensus Estimate for the full year fell to $2.25 per share from $2.48 per share over the past month. For 2013, analysts expect a profit of $2.86 per share, compared to last month’s projection for a profit of $2.90 per share.
Here is a synopsis of why RGLD and VALE 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;
Royal Gold, Inc. (Nasdaq: RGLD) second-quarter profit of 42 cents per share, posted on February 2, lagged analysts’ projections by 12.50%. Estimate for current year slid 12 cents per share to $1.90 per share over a month as next year’s estimate dipped 10 cents per share to $2.38 per share in that time span.
Vale (NYSE: VALE) reported a fourth-quarter profit of 90 cents per share on February 15 that fell 16.67% short of the Zacks Consensus Estimate. The full-year average forecast is currently $3.66 per share, compared with last month’s projection of $3.87 per share. Next year’s forecast dropped to $3.88 per share from $4 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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