Zacks Investment Ideas feature highlights: Titan Machinery, Joy Global, Cliffs Natural Resources and St. Joe

Zacks Investment Ideas feature highlights: Titan Machinery, Joy Global, Cliffs
                        Natural Resources and St. Joe

PR Newswire

CHICAGO, Dec. 24, 2013

CHICAGO, Dec. 24, 2013 /PRNewswire/ -- Today, Zacks Investment Ideas feature
highlights Features: Titan Machinery (Nasdaq:TITN-Free Report), Joy Global
(NYSE:JOY-Free Report), Cliffs Natural Resources (NYSE:CLF-Free Report) and
St. Joe Company (NYSE:JOE-Free Report).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Losers YTD: Time to Sell Them?

Investment Ideas aren't always about which stocks to buy. They are also about
which stocks to sell and why. Normally, people already know when it's time to
cut losses, but sometimes investors just don't want to take the loss and move
on.

The Zacks Rank can help investors determine if it's time to cut a stock loose
or if you should hold on and wait for a turnaround. This is very difficult
questions to answer, but take a look at a few stocks you should be selling and
a couple of beaten down stocks that you should hold onto.

First The Easy Part

I ran a screen for stocks that were down 10% or more year to date, had a Zacks
Rank #4 (Sell) or #5 (Strong Sell). The list was around 200 names long, so I
added in the idea of very recent estimate reductions. Think of that as the
Zacks Rank getting a little stronger over the last few weeks.

Of the 21 names that I had to select from, I saw a few #5's that stood out.
One of them is a former holding of Home Run Investor, a buy and hold service
that I manage. Titan Machinery (Nasdaq:TITN-Free Report) has a good 2012, but
not so much for 2013. This stock is an easy decision, the potential turnaround
here requires a lot.

Estimates for TITN have fallen all year. For 2014, estimates were once as high
as $2.63, but they have tumbled more than 76% to the current level of $0.62.
The same could be said of estimates for the following year as well.

The stock is down 35% year to day and estimates have dropped more than 10% in
the last four weeks, so it is likely that investors will not want to keep this
machinery stock in their portfolio until estimates turn around.

Joy Global (NYSE:JOY-Free Report) isn't a #5, but rather a #4 with potentially
further to fall. It is closely related to TITN, but is only down 14% year to
date. Estimates are falling dramatically for JOY too. Analysts are expecting
$3.27, but that is down more than 51% from the start of the year. 2015 is
seeing an even greater decline.

More recently, analysts have moved estimates for JOY lower by about 10%, so
this one is also a stock that investors should wait for a turnaround from
estimates before they think of getting back in.

Not Time To Sell

One stock that hasn't had such a good year is Cliffs Natural Resources
(NYSE:CLF-Free Report) as the stock is down some 37% year to date. That sort
of pain is hard for investors to swallow, but estimates have already turned
around and are heading back up. That means, that this stock, while likely to
see some tax loss selling in the next week or so, should actually be held.

CLF is a Zacks Rank #1 (Strong Buy) after estimates for 2014 have trended
higher over the last three months, moving from $2.70 in September to $3.00 as
of late November. That move came despite the October 24 earnings report that
saw the company miss the Zacks Consensus Estimate by 9.8%.

Earlier in the year, the company badly missed the December 2012 quarter when
they reported on the 12th of February. The bottom line came in 25% below
expectations and the stock sold off by nearly 20% in the session following the
earnings report.

Knock On Wood

The other name that I wanted to highlight here is The St. Joe Company
(NYSE:JOE-Free Report) which is down 22% this year after the timber market
looked like it would heat up this summer but was cut down to size later in the
year. JOE is a Zacks Rank #1 (Strong Buy) and has seen estimates for 2014
recently turnaround.

After opening the year with two misses of the Zacks Consensus Estimate, JOE
has beaten in each of the last two reports. Those beats haven't really
impacted estimates that much, but after slipping from $0.02 mid-year to -$0.01
in September things were not looking so good.

More recently, the estimates have risen from that loss of a penny to a gain of
$0.04 - a very dramatic turnaround. That tells me that this stock, which is
primed for tax loss selling is one that should not be sold as estimates are
heading in the right direction.

Conclusion

At the end of the year, investors and money managers alike will look at their
holdings and make some tough decisions. Many holdings will likely be showing
gains, but there will be a number of them that will show losses. Knowing which
stocks should be cut loose and which ones still have a good potential to get
the capital back can make a big difference.

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