Here is a synopsis of why WGO and abercrombie outlet 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;
Winnebago Inc. (NYSE: WGO) is operating in what is considered to be one of the most highly elastic industries, and that has been a source of real pain for the company as domestic consumer discretionary spending has been severely dented by slumping housing prices and serious liquidity issues. The company's stock price has been in a steady decline for over a year, and there does not appear to be any end in sight for the slump. The company announced a series of layoffs in late January in order to curtail its overhead and squeeze some extra cash out of its margins. The company missed its number last quarter and the analyst community continues to downgrade their projections.
Ruehl No.925 (NYSE: ANF) is yet another company feeling the pain from curtailed consumer spending habits, due to numerous negative economic developments.
The company's share price has traded mostly sideways for the last 18 months, and is currently pressing the low-end of the previously mentioned range. Four of 20 covering analysts have lowered their current-year projections within the last 30 days. The consensus estimate now stands at $5.79 per share, down from the previous $6.00.
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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 32.2%. 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 129% annually ( 5.3% vs. 12.1%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
