Zacks Sell List Highlights: Allianz SE, Cimarex Energy Co, SPX Corp and Itron

Business Wire, Dec 11, 2008

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): Allianz SE (NYSE: AZ) and Cimarex Energy Co (NYSE: XEC). Further, Zacks announced #4 Rankings (Sell) on two other widely held stocks: SPX Corp (NYSE: SPW) and Itron Inc (NASDAQ: ITRI). 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 80% annually (+2% versus +10%). 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 AZ and XEC 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:

Allianz SE (NYSE: AZ) swung to a 2.02 billion-euro ($2.56 billion) loss in the third quarter, as the value of its investments declined amid the ongoing credit crisis. The insurer also abandoned its profit guidance for 2008. A part of Wall Street feels Allianz has been slow in reacting to the economic challenge and held on to its Dresdner Bank unit far too long. While the average forecast for 2008 earnings is pegged at $1.39 per share, the most accurate estimate is $1.14.

Cimarex Energy Co (NYSE: XEC) fell far short of average forecasts on third-quarter earnings and cut its full-year production volumes forecast due to the recent hurricanes. Quarterly earnings came in at $2.19 per share, while analysts were looking for $2.32. The company now expects production of 484 to 487 million cubic feet of natural gas equivalent per day, down from its August forecast of 480 and 495 MMcfe/d for 2008. The consensus earnings estimate has been accordingly adjusted to $7.49 per share from $7.60.

Here is a synopsis of why SPW and ITRI 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;

SPX Corp (NYSE: SPW) cut the top end of its full-year profit guidance as unfavorable currency translation rates weighed on its foreign sales. The company also saw demand for its heat-management products falling in China. For fiscal 2008, SPX now expects earnings of $6.40-$6.50, narrower than its prior estimate of $6.40-$6.60 per share. As order growths slow, analysts have lowered their annual profit forecast by 16 cents to $6.42 per share in the last 2 months.

Itron Inc (NASDAQ: ITRI) lowered its earnings guidance due to sluggish sales and a stronger dollar. The maker of power meters now sees profit ranging between $3.35 and $3.45 per share, compared with its earlier guidance of $3.35 to $3.50. Revenue expectation has also been adjusted to $1.91 billion and $1.93 billion, down from $1.91 billion to $1.95 billion. The company had a total debt of $1.2 billion, as of September, and also a high debt-to-capital ratio, which are concerning for investors.

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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 +28%. 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 80% annually (+2% versus +10%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

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