What Falling Estimates & Price Mean for XO Group (XOXO) - Tale of the Tape

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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 XO Group Inc. ( XOXO ), 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 XOXO.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 3 estimates moving down in the past 30 days, compared to no upward revision. This trend has caused the consensus to trend lower, declining from 65 cents a share a month ago to its current level at 22 cents.

Also, for the current quarter, XO Group has seen 1 downward estimate revision versus no revision in the opposite direction, dragging the consensus estimate of loss to 1 cent a share from a gain of 7 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 13.9% 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 Internet Content industry, you may instead consider some better-ranked stocks including China Distance Education Holdings Limited ( DL ), Dice Holdings, Inc. ( DHX ) and Global Eagle Entertainment Inc. ( ENT ). All these stocks carry a Zacks Rank #2 (Buy) and may be better selections at this time.

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DICE HOLDINGS (DHX): Free Stock Analysis Report

CHINA DISTANCE (DL): Free Stock Analysis Report

GLOBAL EAGL ENT (ENT): Free Stock Analysis Report

XO GROUP INC (XOXO): Free Stock Analysis Report

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



This article appears in: Investing , Investing Ideas , Stocks

Referenced Stocks: DHX , DL , ENT , XOXO

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