NEW YORK ( TheStreet) -- Is your portfolio weighed down with stocks that are lagging the market? If you hold one of these nine stocks, you should consider dumping them, according to Oppenheimer.

The S&P 500 Index returned a meager 0.2% for the first six months of 2015.

"At last week's low, the S&P 500 was down 3.6% from its all-time high of 2134, but the market environment feels worse than this. [This] is because the dispersion of performance has widened sharply," according to Oppenheimer's July 6 report. "For instance, the spread between the best (Health Care, +24%) and worst (Energy, -24%) performing S&P 500 sectors over the last 52 weeks is the widest since February 2010. This is a reason we continue to place greater emphasis on our sector and stock calls than our market one."

Still, "if the alternative is a bearish view, we believe a bullish S&P 500 outlook remained warranted," the note said. But for investors who have a "less-positive view of the long-term cycle," the report is a technical analysis of which stocks to sell.

Oppenheimer identified nine sub-industries in which to consider selling stocks. It then identified one stock in each of those industries as its top "sell idea." The list "inversely ranks each sector relative to the S&P 500." It then identifies a "key industry laggard relative to each sector" and "pinpoints the stocks that are driving this underperformance vs. each of the industries."

"We expect these stocks to remain a drag on S&P 500 performance over the coming months," the Oppenheimer report said.

Check out Oppenheimer's list, which TheStreet paired with ratings from TheStreet Ratings for comparison.

TheStreet Ratings, TheStreet's proprietary ratings tool, projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Note: Year-to-date returns are based on July 7, 2015 closing prices.

 

FCX Chart FCX data by YCharts

9. Freeport-McMoRan Inc. (FCX - Get Report)
Sector: Materials/Metals & Mining
Market Cap: $18 billion
Year-to-date return: -26.2%
Oppenheimer Sector Rating: Underweight

Freeport-McMoRan Inc., a natural resource company, engages in the acquisition of mineral assets, and oil and natural gas resources. It primarily explores for copper, gold, molybdenum, cobalt, silver, and other metals, as well as oil and gas.

TheStreet Rating: Sell, D+
TheStreet said:
"We rate FREEPORT-MCMORAN INC (FCX) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 585.1% when compared to the same quarter one year ago, falling from $510.00 million to -$2,474.00 million.
  • The debt-to-equity ratio of 1.29 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, FCX has a quick ratio of 0.67, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, FREEPORT-MCMORAN INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $717.00 million or 40.29% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 50.07%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 585.71% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

 

 

 

FE Chart FE data by YCharts

8. FirstEnergy Corp. (FE - Get Report)
Sector: Utilities/Electric Utilities
Market Cap: $14.4 billion
Year-to-date return: -12.6%
Oppenheimer Sector Rating: Underweight

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. The company operates through Regulated Distribution, Regulated Transmission, and Competitive Energy Services segment.

TheStreet Rating: Buy, B-
TheStreet said:
"We rate FIRSTENERGY CORP (FE) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, growth in earnings per share, notable return on equity and increase in net income. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly increased by 309.78% to $193.00 million when compared to the same quarter last year. In addition, FIRSTENERGY CORP has also vastly surpassed the industry average cash flow growth rate of 18.04%.
  • FIRSTENERGY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FIRSTENERGY CORP reported lower earnings of $0.50 versus $0.90 in the prior year. This year, the market expects an improvement in earnings ($2.60 versus $0.50).
  • FE, with its decline in revenue, underperformed when compared the industry average of 3.5%. Since the same quarter one year prior, revenues slightly dropped by 6.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Electric Utilities industry average, but is greater than that of the S&P 500. The net income increased by 6.7% when compared to the same quarter one year prior, going from $208.00 million to $222.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electric Utilities industry and the overall market on the basis of return on equity, FIRSTENERGY CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.

 

RIG Chart RIG data by YCharts

7. Transocean Ltd. (RIG - Get Report)
Sector: Energy/Oil & Gas Drilling
Market Cap: $5.3 billion
Year-to-date return: -14.2%
Oppenheimer Sector Rating: Underweight

Transocean Ltd., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells worldwide. The company primarily offers deepwater and harsh environment drilling services.

TheStreet Rating: Sell, D+
TheStreet said:
"We rate TRANSOCEAN LTD (RIG) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 205.9% when compared to the same quarter one year ago, falling from $456.00 million to -$483.00 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Energy Equipment & Services industry and the overall market, TRANSOCEAN LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 65.09%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 203.93% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • TRANSOCEAN LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TRANSOCEAN LTD swung to a loss, reporting -$5.25 versus $3.85 in the prior year. This year, the market expects an improvement in earnings ($2.36 versus -$5.25).
  • RIG, with its decline in revenue, underperformed when compared the industry average of 0.8%. Since the same quarter one year prior, revenues fell by 12.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

 

 

JEC Chart JEC data by YCharts

6. Jacobs Engineering Group Inc. (JEC - Get Report)
Sector: Industrials/Construction & Engineering
Market Cap: $5 billion
Year-to-date return: -10.4%
Oppenheimer Sector Rating: Market Weight

Jacobs Engineering Group Inc. provides technical, professional, and construction services to various industrial, commercial, and governmental clients.

TheStreet Rating: Buy, B-
TheStreet said:
"We rate JACOBS ENGINEERING GROUP INC (JEC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • JEC's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, JEC has a quick ratio of 1.58, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 73.39% to -$34.79 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 60.24%.
  • JACOBS ENGINEERING GROUP INC's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JACOBS ENGINEERING GROUP INC reported lower earnings of $2.48 versus $3.23 in the prior year. This year, the market expects an improvement in earnings ($3.00 versus $2.48).
  • JEC, with its decline in revenue, slightly underperformed the industry average of 4.0%. Since the same quarter one year prior, revenues slightly dropped by 8.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for JACOBS ENGINEERING GROUP INC is rather low; currently it is at 18.21%. Regardless of JEC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, JEC's net profit margin of 2.82% compares favorably to the industry average.

 

KO Chart KO data by YCharts

5. Coca-Cola Co. (KO - Get Report)
Sector: Consumer Staples/Beverages
Market Cap: $175.4 billion
Year-to-date return: -4.7%
Oppenheimer Sector Rating: Market Weight

The Coca-Cola Company, a beverage company, manufactures and distributes various nonalcoholic beverages worldwide. The company primarily offers sparkling beverages and still beverages.

TheStreet Rating: Buy, B-
TheStreet said:
"We rate COCA-COLA CO (KO) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • KO's revenue growth has slightly outpaced the industry average of 5.5%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $1,574.00 million or 47.65% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 21.85%.
  • The gross profit margin for COCA-COLA CO is rather high; currently it is at 66.11%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.53% trails the industry average.
  • COCA-COLA CO' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, COCA-COLA CO reported lower earnings of $1.59 versus $1.90 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.59).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Beverages industry and the overall market, COCA-COLA CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
HCP Chart HCP data by YCharts

4. HCP Inc. (HCP - Get Report)
Sector: Financial Services/REITs
Market Cap: $17.6 billion
Year-to-date return: -13.8%
Oppenheimer Sector Rating: Market Weight

HCP, Inc. is an independent hybrid real estate investment trust. The fund invests in real estate markets of the United States.

TheStreet Rating: Hold, C
TheStreet said:
"We rate HCP INC (HCP) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HCP's revenue growth has slightly outpaced the industry average of 8.6%. Since the same quarter one year prior, revenues rose by 14.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for HCP INC is rather high; currently it is at 56.55%. Regardless of HCP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HCP's net profit margin of -38.53% significantly underperformed when compared to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 192.9% when compared to the same quarter one year ago, falling from $259.11 million to -$240.61 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, HCP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

 

 

QCOM Chart QCOM data by YCharts

3. Qualcomm Inc. (QCOM - Get Report)
Sector: Technology/Communications Equipment
Market Cap: $102.3 billion
Year-to-date return: -15.5%
Oppenheimer Sector Rating: Overweight

QUALCOMM Incorporated designs, develops, manufactures, and markets digital communications products and services in China, South Korea, Taiwan, and the United States.

TheStreet Rating: Buy, B-
TheStreet said:
"We rate QUALCOMM INC (QCOM) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • QCOM's revenue growth has slightly outpaced the industry average of 0.0%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • QCOM's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.86, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Communications Equipment industry and the overall market, QUALCOMM INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for QUALCOMM INC is rather high; currently it is at 67.17%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.27% trails the industry average.
  • QUALCOMM INC's earnings per share declined by 44.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, QUALCOMM INC increased its bottom line by earning $4.40 versus $3.91 in the prior year. This year, the market expects an improvement in earnings ($4.79 versus $4.40).

 

HRB Chart HRB data by YCharts

2. H&R Block Inc. (HRB - Get Report)
Sector: Consumer Goods & Services/Specialized Consumer Services
Market Cap: $8.3 billion
Year-to-date return: -10.5%
Oppenheimer Sector Rating: Overweight

H&R Block, Inc., through its subsidiaries, provides tax preparation, banking, and other services to the general public primarily in the United States, Canada, and Australia.

TheStreet said: Buy, A-
TheStreet said:
"We rate BLOCK H & R INC (HRB) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HRB's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.44, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for BLOCK H & R INC is rather high; currently it is at 65.60%. Regardless of HRB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HRB's net profit margin of 32.10% significantly outperformed against the industry.
  • BLOCK H & R INC's earnings per share declined by 19.9% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, BLOCK H & R INC reported lower earnings of $1.75 versus $1.78 in the prior year. This year, the market expects an improvement in earnings ($1.93 versus $1.75).
  • HRB, with its decline in revenue, slightly underperformed the industry average of 1.9%. Since the same quarter one year prior, revenues fell by 10.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Diversified Consumer Services industry average, but is less than that of the S&P 500. The net income has decreased by 18.8% when compared to the same quarter one year ago, dropping from $910.00 million to $738.84 million.

 

MRK Chart MRK data by YCharts

1. Merck & Co. (MRK - Get Report)
Sector: Health Care/Pharmaceuticals
Market Cap: $163.8 billion
Year-to-date return: 2.1%
Oppenheimer Sector Rating: Overweight

Merck & Co., Inc. provides health care solutions worldwide. The company offer therapeutic and preventive agents to treat cardiovascular, type 2 diabetes, asthma, nasal allergy symptoms, allergic rhinitis, chronic hepatitis C virus, HIV-1 infection, fungal infections, intra-abdominal infections, hypertension, arthritis and pain, inflammatory, osteoporosis, male pattern hair loss, and fertility diseases.

TheStreet said: Buy, B+
TheStreet said: 
"We rate MERCK & CO (MRK) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.09, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for MERCK & CO is currently very high, coming in at 94.01%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, MRK's net profit margin of 10.11% significantly trails the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market on the basis of return on equity, MERCK & CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • MRK, with its decline in revenue, slightly underperformed the industry average of 2.0%. Since the same quarter one year prior, revenues slightly dropped by 8.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.