Zacks Sell List Highlights: The Ryland Group, Inc., American Express Co., Nordstrom, Inc., Cooper Tire & Rubber Co.

2008-08-20 22:57:08 -

- 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): The Ryland Group, Inc. (NYSE: RYL) and American Express Co. (NYSE: AXP). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Nordstrom, Inc. (NYSE: JWN) and Cooper Tire & Rubber Co. (NYSE: CTB). To see the full Zacks #5 Rank List - Stocks to Sell Now visit: 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 81% annually (+2% vs. +11%). 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 RYL and AXP 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:

The Ryland Group, Inc. (NYSE: RYL) reported a loss of $5.70 per share in 2Q08, worse than a loss of $1.25 per share in the prior-year, due to a decline in sales and margins as a result of the slowdown in the U.S. housing market. The company's gross margins are expected to remain under pressure due to weaker average selling prices, heightened incentive use and accelerated option write-offs. Wall Street experts now expect the company to post a loss of $7.77 per share in fiscal 2008.

American Express Co. (NYSE: AXP) shares slipped $1.08 or 2.8 percent to $37.99 on Monday, August 18, after increased rates of delinquencies and defaults in July came to light. Analysts now paint a gloomy scenario of steep credit losses over the coming six to nine months because of a difficult economic environment. Reports of sharply higher inflation led AXP shares to become among the biggest drags on the Dow. The current quarter EPS consensus estimate is $0.70.

Here is a synopsis of why JWN and CTB 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;

Nordstrom, Inc. (NYSE: JWN) reported second-quarter sales of $2.287 billion, which was in-line with its preliminary report and EPS of $0.65, $0.01 above consensus. However, the company slashed its full-year outlook as the upscale store chain's margin is expected to remain under continuous pressure. The situation is further aggravated as one-third of the company's stores are in California, which is experiencing one of the worst housing markets in the country. While the second quarter EPS consensus estimate is $0.51, over the last 12 weeks, the stock has lost 4.91% in value.

Cooper Tire & Rubber Co. (NYSE: CTB) suffered a loss of $22.2 million, or 38 cents per share in the second quarter, compared to a profit of $17.6 million, or 28 cents per share, in the year-ago period. Wall Street experts were expecting sales of $734 million in the recent quarter. The company has also sold its 10.71% stake in Kumho Tire Co., Ltd. to Beacon. The challenging North American auto environment, elevated raw material costs and strong competition will continue to chase the company in the near term. The detailed earnings estimates point to a loss of $0.33 per share in fiscal 2008.

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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 +30%. 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 81% annually (+2% vs. +11%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

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