Zacks strong sell - Tyson
Zacks Sell List Highlights: Red Robin Gourmet Burgers, Tyson Foods, Mosaic, and Petrohawk Energy
CHICAGO--(BUSINESS WIRE)--Jan. 19, 2006--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): Red Robin Gourmet Burgers, Inc. (Nasdaq:RRGB) and Tyson Foods, Inc. (NYSE:TSN). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Mosaic, Inc. (NYSE:MOS) and Petrohawk Energy Corporation (Nasdaq:HAWK). 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 (11.8% 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 RRGB and TSN 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:
Red Robin Gourmet Burgers, Inc. (Nasdaq:RRGB) blamed slower than anticipated same-store sales growth as well as weak performance at some locations outside of the comparable base for impacting its results. The company said that the lackluster growth will likely result in fiscal 2005 profits totaling $1.60-$1.63 per share versus the previous guidance for $1.71-$1.73 per share. Following the announcement, seven of the 11 covering analysts cut their forecasts. The current consensus estimate for fiscal 2005 profits of $1.67 per share compares to last month's estimate of $1.76 per share.
Tyson Foods, Inc. (NYSE:TSN) has missed earnings expectations during three out of the past four quarters. Two of the eight covering analysts have cut their projections for the fiscal 2006. The new consensus estimate for profits of $1.12 per share compares to the one month ago estimate for profits of $1.17 and the 90-day old estimate of $1.37 per share.
Here is a synopsis of why MOS and HAWK 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:
Mosaic, Inc. (NYSE:MOS) recently warned that DAP margins and equity earnings are likely to be lower in the second half of fiscal 2006. As a result, one of the three covering analysts cut his projections for full year earnings. The new consensus estimate calls for fiscal 2006 profits of 83 cents versus 87 cents a week ago and 98 cents two months ago.
Petrohawk Energy Corporation (Nasdaq:HAWK) has missed estimates four times during the past five quarters. Two of the four covering analysts revised their forecasts after the company released projections for 2006 daily production and expenses. The new consensus estimate for 2006 profits of $1.05 per share is 3.7% below the estimate of 30 days ago.
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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 +33%. 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. +11.8%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
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