Dec 23

Written by:
12/23/2008 12:50 PM 

This market has been difficult to predict and I still favor a largely cash based portfolio until there is a clear break to either the upside or on the downside on the major indices.  That being said, it appears that the markets are beginning to break down from what was looking like a possible bottom. Therefore, I have three stocks today that broke down prior to the overall markets and signaled a hold within the past week.

Chevron Corp (NYSE: CVX)

            Never would I have recommended this stock for a long position with the analyst estimates coming in so poor for the future quarters and the coming years. The current quarter and year appear to have decent growth with 30% revenue growth for the year and 32% percent earnings growth for the year. But that was the old story. The new story is the price of oil is going to change all the positives and make them negatives. Next year analyst are expecting a 20% drop in revenue and a 37% reduction in earnings. If oil continues it’s decent, Chevron won’t be getting any buyers in the near term.

Cintas Corp (NASDAQ: CTAS)

            Cintas is the uniform company that provides uniforms and other related services to companies in the US and Canada. Not the terrible picture that Chevron is experiencing but declining payrolls equals fewer uniforms and investors are moving away from Cintas stock. Analysts have decreased their expectations for earnings in the current quarter, the next quarter, and for the year. Look for flat revenue growth and a 6% to 8% decline in earnings.

Worthington Industries (NYSE: WOR)

            What fell from $60 to $30 over the past three months? You are thinking maybe the price of oil. How about the Market Vectors Steel ETF, which tracks the price of the AMEX steel index? Worthington Industries is selling off today to the tune of 6% but had rallied along with the price of steel from $9 to $14. Revenues are bad and earnings are even worse for this diversified metal processing company. Analysts are looking for 16% revenue declines in the current quarter with 20% declines in the next quarter ending May of 2009. Earnings are expected to fall 68% year over year for the current quarter and 64% for the next quarter. Try to catch this one before it reaches a new 52 week low.