Zacks Sell List Highlights: Cabot Microelectronics, American Italian Pasta, Kroger, and Toys 'R' Us
CHICAGO--(BUSINESS WIRE)--May 26, 2004--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: Cabot Microelectronics (NASDAQ:CCMP) and American Italian Pasta Company (NYSE:PLB). Further they announced #4 Rankings (Sell) on two other widely held stocks: Kroger Company (NYSE:KR) and Toys 'R' Us (NYSE:TOY).
Cabot Microelectronics (NASDAQ:CCMP) is the leading supplier of chemical mechanical planarization (CMP) slurries for polishing various materials used in semiconductor manufacturing processes. Earnings estimates for the year ending September 2004 remain below levels from two months ago for Cabot Microelectronics by 33 cents, or approximately -16%. The company's fiscal second quarter was a challenging one, and in late April it reported diluted earnings of 39 cents per share. That result fell short of the prior quarter but topped the year-ago total by two cents. However, the result missed the consensus at the time by about -17%. But Cabot Microelectronics reported a year-over-year revenue rise, and said that the breadth and depth of its infrastructure, along with a renewed focus on costs, provides the company with continued opportunities to capture efficiencies and economies of scale in its business. While this bodes well for the future, investors may want to stay on the sidelines for now and watch for its earnings estimates to head higher before taking a position.
FLASHBACK at $72---January 19, 2001 Cabot Microelectronics - Tim Detloff of the Monetta Small-Cap Fund http://www.monetta.com provides the following stock idea.
"Do you know what slurries are? No, it's not an ice-cream drink found in your local fast-food restaurant. In the manufacturing of semiconductor devices smaller than .25 microns, slurries are used in the polishing process. These slurries are increasingly being used in smaller semiconductor chips, which are growing at four times the rate of the overall semiconductor industry.
Cabot Microelectronics (CCMP 72 1/2) has captured about 80 percent of the slurry market. Tim Detloff of the Monetta Small-Cap Fund particularly favors Cabot Microelectronics because of its highly visible revenue growth. "The company is expanding production capacity as we speak," he says. "Cabot essentially has a monopoly on the industry." Detloff notes that Cabot will soon be moving into the optical components area, and hard drives may eventually need to use slurries in the production process. "Cabot has easily exceeded earnings expectations in the last two quarters. . . This looks like a good long-term story over the next five years." Analysts project that Cabot will earn about $1.85 in the fiscal year ending in September 2001 and about $2.23 in fiscal 2002. Detloff thinks its stock could reach $100 within the next 12 to 18 months." (or $20)
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