Zacks Sell List Highlights: Avnet, Saks, DeVry, and Siebel Systems

Business Wire, August 24, 2004

CHICAGO -- Zacks.com releases details on a group of stocks that are part of their exclusive list of Stocks to Sell Now. These stocks are currently rated as a Zacks Rank #5 (Strong Sell). Since inception in 1988 the S&P 500 has outperformed the Zacks #5 Ranked Strong Sells by 140% annually (12.0% vs. 5.0% respectively). While the rest of Wall Street continued to tout stocks during the market declines of the last few years, we were telling our customers which stocks to sell in order to save themselves the misery of unrelenting losses. Among the #5 ranked stocks today we highlight the following companies: Avnet, Inc. (NYSE:AVT) and Saks, Inc. (NYSE:SKS). Further they announced #4 Rankings (Sell) on two other widely held stocks: DeVry, Inc. (NYSE:DV) and Siebel Systems, Inc. (NASDAQ:SEBL). To see the full Zacks #5 Ranked list of Stocks to Sell Now then visit: http://at.zacks.com/?id=92

Here is a synopsis of why these stocks have a Zacks Rank of 5 (Strong Sell) and should most likely be sold or avoided for the next 1 to 3 months. Note that a #5/Strong Sell rating is applied to 5% of all the stocks we rank:

Avnet, Inc. (NYSE:AVT) is one of the world's largest distributors of semiconductors, interconnect, passive and electromechanical components, enterprise network and computer equipment, and embedded sub-systems from leading manufacturers. Earlier this month, Avnet reported a solid fiscal fourth quarter performance, however, earnings estimates for the year ending June 2005 are below levels from one month ago. In that quarterly report, the company forecasted fiscal first quarter earnings of between 30 cents and 35 cents per share, which would mark a decline sequentially but an improvement from last year. The consensus was expecting 41 cents for the quarter. Its consolidated sales expectation of between $2.55 billion and $2.65 billion was also below what many analysts were expecting. Avnet has experienced some downward revisions from analysts, and earnings estimates for the fiscal year moved lower 26 cents, or about -15%, from one month ago. But Avnet, which had a Zacks #1 ranking in late June, put together a strong quarter with net income of 40 cents per share that topped the consensus and revenues that improved 21%. Analysts may feel more comfortable in boosting this company's earnings estimates moving forward, so investors may want to consider holding off on opening or deepening a position right now.

Saks, Inc. (NYSE:SKS) is a national retailer currently operating stores throughout numerous states. Excluding items, Saks recently reported a second quarter loss of (19 cents) per share, which was a steeper loss than the consensus was expecting. The company said Saks Fifth Avenue Enterprises (SFAE) had a strong second quarter and first half, but the operating performance at Saks Department Store Group (SDSG) was short of the company's expectations. Earnings estimates for the year ending January 2005 have slumped 6 cents, or about -7%, in the past seven trading days. Nevertheless, year-to-date operating income jumped 235% at SFAE, driven by a same-store sales advance of 16.1%, and this well-known retailer should be in a better position moving forward as SDSG improves. For now though, investors may want wait on a position for its earnings estimates to move forward.

Below is a synopsis of why these two stocks have a Zacks Rank of 4 (Sell) and should also most likely be sold or avoided for the next 1 to 3 months. Note that a #4/Sell rating is applied to 15% of all the stocks we rank:

DeVry, Inc. (NYSE:DV) is the holding company for DeVry University, Ross University and Becker Professional Review. Last week, DeVry reported fiscal fourth quarter net income of 22 cents per diluted share, which was a penny, or more than -4%, below the consensus. The company announced that new undergraduate student enrollment for the 2004 summer term increased by 0.9%, which was below what some analysts were expecting. Furthermore, total undergraduate student enrollment in the 2004 summer term declined -5.8%. Some analysts have issued lowered revisions for the year ending June 2005, and earnings estimates for that year have moved lower in the past seven trading days. Nevertheless, DeVry reported that revenues of $200 million increased 14.7% year-over-year, and although weak technology enrollments will continue impacting near-term performance, the company is confident it will be successful in attracting more full-time students. At the moment though, investors may want to be patient, and wait for analysts to boost the company's earnings estimates before taking a position.

Siebel Systems, Inc. (NASDAQ:SEBL) is a leading provider of business applications software. Over the past several weeks, Siebel has experienced more downward revisions than upward revisions from analysts for the year ending December 2004. Furthermore, those downward revisions have been steeper than any upward revisions. Earnings estimates for the year remain below levels from two months ago by 12 cents, or about -39%, including a slide of 2 cents, or approximately -10%, in the past 30 trading days. In late July, the company posted second quarter net income of 2 cents per diluted share on total revenues of $301.1 million, which came in-line with a lowered outlook from earlier in the month. But Siebel Systems is an innovative company that should be in a better position moving forward, especially as it passes by the challenges that impacted the quarter, which included delayed purchasing decisions from customers. But investors may want to hold off on allocating funds to their portfolios at the moment and give its earnings estimates a chance to gain more upward momentum.