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 American Vanguard Corp. ( AVD ), 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 AVD.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 2 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 69 cents a share a month ago to its current level of 62 cents.
Also, for the current quarter, American Vanguard has seen 1 downward estimate revision versus no revisions in the opposite direction, dragging the consensus estimate down to 10 cents a share from 13 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 10.1% 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 chemicals specialty sector, you may instead consider some better-ranked stocks including Minerals Technologies Inc. ( MTX ), with a Zacks Rank #1 (Strong Buy), International Flavors & Fragrances Inc. ( IFF ) and KMG Chemicals Inc. ( KMG ), each holding a Zacks Rank #2 (Buy). All these stocks may be better selections at this time.
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AMER VANGUARD (AVD): Free Stock Analysis Report
MINERAL TECH (MTX): Free Stock Analysis Report
INTL F & F (IFF): Free Stock Analysis Report
KMG CHEMICALS (KMG): Free Stock Analysis Report
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