What Falling Estimates & Price Mean for Taomee Holdings (TAOM) - Tale of the Tape

Shutterstock photo

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 Taomee Holdings Ltd. ( TAOM ), 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 TAOM.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 1 estimate moving down in the past 30 days, with no upward revision. This trend has caused the consensus estimate to move downward from a profit of 19 cents a share a month ago to its current level of a loss of 3 cents.

Also, for the current quarter, Taomee Holdings's has seen 1 downward estimate revision versus no revisions in the opposite direction, the consensus estimate also widens to a loss of 4 cents a share from a loss of 1 cent over the past 30 days.      

The stock also has seen some pretty dismal trading lately, as the share price has dropped 10.5% 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 Computer and Technology sector, you may instead consider some better-ranked stocks including China Distance Education Holdings Limited ( DL ), Move, Inc. ( MOVE ) and Shutterfly, Inc. ( SFLY ). All these stocks hold a Zacks Rank #2 (Buy) and may be better selections at this time.

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 >>

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

TAOMEE HOLDINGS (TAOM): Free Stock Analysis Report

CHINA DISTANCE (DL): Free Stock Analysis Report

MOVE INC (MOVE): Free Stock Analysis Report

SHUTTERFLY INC (SFLY): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Investing Ideas , Stocks
Referenced Symbols: DL , SFLY

More from Zacks.com




Equity Research

Research Brokers before you trade

Want to trade FX?

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by BankRate.com