Zacks Sell List Highlights: Mercury Interactive, Ruby Tuesday, Airspan Networks, and Radware

Business Wire, July 13, 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): Mercury Interactive Corporation (NASDAQ:MERQ) and Ruby Tuesday, Inc. (NYSE:RI). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: Airspan Networks Inc. (NASDAQ:AIRN) and Radware (NASDAQ:RDWR). 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 (11.88% vs. 4.65% 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 MERQ and RI 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:

Mercury Interactive Corporation (NASDAQ:MERQ) warned last week that second-quarter 2005 revenues and earnings would be below previous guidance because of a shortfall in orders from European customers. Sales are now expected to be in a range of $200-$205 million instead of $205-$215 million. Non-GAAP earnings are expected to be a range of 30-35 cents per share instead of 33-37 cents. Following the warning, 11 analysts cut their forecasts; the new consensus estimate for 34 cents per share is two cents below the level of a week ago. MERQ last missed earnings estimates during the second quarter of 2004.

Ruby Tuesday, Inc. (NYSE:RI) missed fiscal fourth-quarter expectations with profits of 40 cents per share; the consensus forecast had call for earnings of 41 cents. Same-store sales at company-owned Ruby Tuesday restaurants fell 8.9%. For the fiscal first-quarter, RI anticipates a 4% decline at company-owned Ruby Tuesday restaurants, which should result in earnings per share of 33 cents. Prior to the release of the new guidance, analysts were predicting fiscal first-quarter profits of 40 cents per share.

Here is a synopsis of why AIRN and RDWR 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:

Airspan Networks Inc. (NASDAQ:AIRN) said last week that it anticipates second-quarter revenues to be approximately 12% below its previous guidance for $23.8 million. The company was unable to fulfill all of the orders booked for June delivery because of a "lack of availability" for a component used in some of Airspan's Proximity products. Losses for the quarter will also be below guidance, previously set at $2.9 million, because of reduced gross margins and "unforeseen product and period costs". As a result, analysts have slashed their forecasts to a loss per share of 11 cents per share versus a loss of seven cents a week ago.

Radware (NASDAQ:RDWR) CEO Roy Zisapel opined last week that there appears to be "a lot of confusion" among customers, resellers, and value added distributors caused by merger and acquisition activity in the application networking space. Zisapel also warned that second-quarter revenues would be approximately $17.5 million instead of the $21 million the company previously forecast. Analysts reacted to the statements by cutting their estimates for the full year to earnings of 69 cents per share, down 22% from a week ago.

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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 32.8%. 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 ( 4.65% vs. 11.88%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

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