Zacks Sell List Highlights: IBM, Dynegy Inc., Allied Waste Industries, Inc. and Fifth Third Bancorp

Business Wire, April 19, 2005

CHICAGO -- 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): IBM (NYSE:IBM) and Dynegy Inc. (NYSE:DYN). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Allied Waste Industries, Inc. (NYSE:AW) and Fifth Third Bancorp (NASDAQ:FITB). 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 133.5% annually (12.21% vs. 5.23% 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 IBM and DYN 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 Zacks ranked stocks:

IBM (NYSE:IBM) reported first quarter earnings of 85 cents per share from continuing operations last week, missing the consensus estimate by almost 7%. Revenues improved by 3% to $22.9 billion, but were still shy of Wall Street expectations. The company said it had difficulty closing transactions in the final weeks of the quarter, particularly in countries with soft economic. Consequently, IBM did not achieve all of its goals in the quarter. The company experienced a number of downward revisions from analysts of late, sending earnings estimates for the year ending December 2005 lower in the past seven trading days.

Dynegy Inc. (NYSE:DYN) announced settlements to two shareholder lawsuits. The first was a class action lawsuit, brought by the Regents of the University of California, concerning an alleged violation of securities laws primarily relating to a structured natural gas transaction that was entered into by DYN in 2001. The second lawsuit, brought by two plaintiffs, was settled on the basis of corporate governance charges. Dynegy acknowledged that the settlements will impact 2005 GAAP earnings, but stated the associated costs will not affect core business profits. Nonetheless, the full year consensus estimate was lowered by a penny last week. This extended a trend of increasing pessimism among analysts with full-year forecasts dropping from a loss of 27 cents to a loss of 41 cents - a 52% decrease.

Here is a synopsis of why AW and FITB 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 ranked by Zacks:

Allied Waste Industries, Inc. (NYSE:AW) recently completed a refinancing plan that included the offering of common stock, preferred stock, and secured debt. The company estimates that the new credit facility will reduce annual cash interest payments by almost $60 million. The savings are not swaying analysts' sentiment concerning the Allied Waste's near-term profitability, however. Over the past 90 days, the consensus forecast for 2005 earnings has fallen by 12 cents, or 23%, to 40 cents per share.

Fifth Third Bancorp (NASDAQ:FITB) CEO George A. Schaefer, Jr. said last week that he was "not satisfied" with his company's first quarter results. Although the company met expectations with profits of 73 cents per share, analysts lowered their forecasts for both the second quarter and third quarter by two cents to 76 cents and 80 cents, respectively. Full year estimates also were reduced, from $3.58 to $3.51 per share - 2%, decrease.

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About the Zacks Rank

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 33.4%. 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 133.5% annually ( 5.23% vs. 12.21%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

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