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 SecureWorks Corp. SCWX , 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 #4 (Sell) further confirms weakness in SCWX.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen two estimates moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from a loss of 31 cents a share a month ago to its current level of loss of 43 cents.
Also, for the current quarter, SecureWorks has seen two downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to a loss of 11 cents a share from a loss of 7 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 11.41% in the past month.
SecureWorks Corp. Price and Consensus
SecureWorks Corp. Price and Consensus | SecureWorks Corp. Quote
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 Computer and Technology sector, you may instead consider a better-ranked stock - Applied Optoelectronics, Inc. AAOI . The stock currently holds a Zacks Rank #1 (Strong Buy) and may be a better selection at this time. You can see the complete list of today's Zacks #1 Rank stocks here .
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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 report SecureWorks Corp. (SCWX): Free Stock Analysis Report Applied Optoelectronics, Inc. (AAOI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research