Zacks Sell List Highlights: HCA, TECO Energy, Gemstar-TV Guide, and Sun Microsystems

Business Wire, June 16, 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 96.9% annually (12.0% vs. 6.1% 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: HCA, Inc. (NYSE:HCA) and TECO Energy, Inc. (NYSE:TE). Further they announced #4 Rankings (Sell) on two other widely held stocks: Gemstar-TV Guide International, Inc. (NASDAQ:GMST) and Sun Microsystems, Inc. (NASDAQ:SUNW). 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:

HCA, Inc. (NYSE:HCA) owns and operates hospitals and other healthcare facilities. It is dedicated to providing healthcare services that meet each community's local healthcare needs. Earnings estimates for the year ending December 2004 remain below expectations from three months ago for HCA by 25 cents, or approximately -9%. The company had to deal with a challenging first quarter due to factors such as increases in uninsured patient volumes and bad debt. In late April, the company reported net income of 69 cents per diluted share, which fell well short of the year-ago total. Earlier that month, HCA had warned earnings per share for the quarter would come in below the consensus and its expectations. The result did match that lowered guidance. But despite the above-mentioned challenges in the period, HCA said the quarter's results were quite positive, and the company remains confident that its existing assets, market locations and its reinvestment strategy will produce solid returns for shareholders in the long term. HCA should be in a better situation as it passes by this tough time, but for right now, investors may want to stay patient and wait for its earnings estimates to gain more upside momentum before making a move.

TECO Energy, Inc. (NYSE:TE) is a diversified, energy-related holding company. In late April, TECO Energy posted earnings per share from continuing operations of 15 cents, which fell short of the consensus at the time by more than -28%. The company stated it had some challenges in the quarter especially due to mild weather, which impacted its electric utility operations and some operating setbacks at TECO Transport. The company has experienced a few downward revisions from analysts over the past several weeks, and earnings estimates for the year ending December 2004 are down 6 cents, or about -7%, from three months ago, including a slide of 3 cents, or approximately -3%, over the past 30 trading days. However, TECO Energy did report a good performance from its coal operations, and the company said it sees opportunities for improvement over these results as the year progresses. Also, the stronger U.S. economy should help moving forward. As conditions improve, TECO Energy should be able to fulfill its potential, but investors may want to hold off on opening or deepening a position right now until its earnings estimates head higher.

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:

Gemstar-TV Guide International, Inc. (NASDAQ:GMST) is a leading global technology and media company focused on consumer entertainment. Earnings estimates for the year ending December 2004 remain at a loss for Gemstar-TV Guide, compared to a profit expectation two months ago. In its first quarter report from early May, the company reduced its guidance for 2004 to reflect challenges in its magazine business, significant legal expenses resulting from its ongoing corporate and intellectual property litigation matters, and plans to moderately increase its investment in key businesses. As for the quarter, Gemstar-TV Guide reported a loss from continuing operations of (3 cents) per diluted share, which narrowed the year-ago loss but fell short of a consensus from two analysts covering the company. However, the Gemstar-TV Guide said its balance sheet is strong, distribution of its key products is secure, and it has removed many of the distractions that have hindered it from realizing the true value of its array of assets. Gemstar-TV Guide should be in a better situation as it continues to make improvements, but for now investors may want to stay on the sidelines until its earnings estimates get back on track.

Sun Microsystems, Inc. (NASDAQ:SUNW) is one of the leading worldwide providers of products, services and support solutions for building and maintaining network computing environments. In mid-April, Sun Microsystems reported its fiscal third quarter numbers, which included a non-GAAP net loss of (8 cents) per share, excluding items, on revenues of $2.65 billion. That earnings result was steeper than the consensus at the time, while revenues declined -8.2% sequentially and -5% year-over-year. Analysts still expect a loss for the year ending this month, and have widened that loss estimate by about 8 cents from three months ago. However, Sun Microsystems' fiscal third quarter results were within ranges provided in early April, and given its large presence in its industry, the company should be in a better position moving forward. In the meantime though, investors may want to hold off on allocating funds to their portfolios until analysts give this company's earnings estimates a boost.