Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.
One such stock that you may want to consider dropping is Finisar Corp
. ( FNSR
), which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #5 (Strong Sell) further confirms weakness in FNSR.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 5 estimates moving down in the past 30 days, compared with no upward revision. This trend has caused the consensus estimate to trend lower, going from $1.40 a share a month ago to its current level of $1.08.
Also, for the current quarter, Finisar has seen 5 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to 24 cents a share from 32 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 17.38% in the past month.
So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don't have a long time horizon to wait.
If you are still interested in the Fiber Optics sector, you may instead consider some better-ranked stocks including Alliance Fiber Optic Products
) and Ciena Corporation
). Investors interested in the broader Computer and Technology industry may consider Applied Micro Circuits Corporation
). While Alliance Fiber Optic Products and Applied Micro Circuits carry a Zacks Rank #1 (Strong Buy), Ciena Corporation carries a Zacks Rank #2 (Buy) and may be better selections at this time.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportFINISAR CORP (FNSR): Free Stock Analysis ReportALLIANCE FIBER (AFOP): Free Stock Analysis ReportCIENA CORP (CIEN): Free Stock Analysis ReportAPPLD MICRO CIR (AMCC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research