Early Bird Special (EBS)

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COMS-Zacks Sell List Highlights: ESS Technologies, Mylan Labs, 3Com Corporation, and Weight Watchers

Thursday , December 23, 2004 06:00 ET

CHICAGO, Dec 23, 2004 (BUSINESS WIRE) --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): ESS Technologies, Inc. (NASDAQ:ESST) and Mylan Laboratories, Inc. (NYSE:MYL). Further they announced #4 Rankings (Sell) on two other widely held stocks: 3Com Corp. (NASDAQ:COMS) and Weight Watchers International, Inc. (NYSE:WTW). To see the full Zacks #5 Ranked list of Stocks to Sell Now then visit: http://at.zacks.com/?id=92

Since inception in 1988, the S&P 500 has outperformed the Zacks #5 Ranked Strong Sells by 168.2% annually (11.8% vs. 4.4% 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 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 Zacks ranked stocks:

ESS Technologies, Inc. (NASDAQ:ESST) posted a non-GAAP net loss for the third quarter of (51 cents) per diluted share, underperforming its year ago earnings of 13 cents. The result also fell short of the consensus. Earnings estimates for the year ending December 2004 have moved from a profit to loss over the past two months. The company said that third quarter worldwide video demand did not materialize as expected for the industry as a whole. The company also stated it now appears that this year's second half demand for video products will be lower than the first half demand.

Mylan Laboratories, Inc. (NYSE:MYL): For the year ending March 2005 earnings estimates are down 24 cents, or about -22% from 60 days. The company reported fiscal second quarter earnings per share of 18 cents, slipping below last year's 33 cents. One factor that contributed to Mylan's underperformance was a lack of new significant product launches. The company also revised earnings guidance for fiscal 2005 to between 80 cents and 90 cents per diluted share, which was below the consensus and its earlier view.

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 ranked by Zacks:

3Com Corp. (NASDAQ:COMS) slashed its second quarter revenue guidance due to lower restructuring charges in the quarter compared with a year ago. The company then reported an earnings loss of (12 cents), missing the consensus by about -9%. In the previous quarter, the company also missed estimates by over -28%. This trend has led analysts to reduce fiscal 2005 earnings estimates by -63% over the past month. Revenue for the fiscal second quarter was $151 million, including $138 million for sales of enterprise networking products and $13 million for sales of connectivity products. Total revenue declined -7% sequentially, and -17% from the same quarter one year ago.

Weight Watchers International, Inc. (NYSE:WTW) announced results for the third quarter ended October 2, 2004 in November. While off to a slower start than expected, Weight Watchers believes that the new program is laying the foundation in NACO for future growth. Its international operations continue to perform well. Earnings have remained fairly steady falling a penny in the two months. As January 1 rolls around, many Americans may be more concerned with their waistline and could further benefit Weight Watchers International.

Truly taking advantage of the Zacks Rank requires the understanding of how it works. The free special report; "Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions" is available here to provide this insightful background. Download a free copy now to prosper in the years to come. http://at.zacks.com/?id=93

About the Zacks Rank

For over 15 years, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988 the #1 Ranked stocks have generated an average annual return of +32.9% compared to the (a)S&P 500 return of only +11.8%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). And since 1988 the S&P 500 has outperformed the Zacks #5 Ranked Strong Sells by 168.2% annually (11.8% vs. 4.4% respectively). Thus, the Zacks Rank system can truly be used to effectively manage portfolio trading.

Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of Zacks #1 and #5 Ranked stocks, highlighting stocks to buy and sell using Zacks time tested stock evaluation model. http://at.zacks.com/?id=94

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Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

SOURCE: Zacks.com

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