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 IntraLinks Holdings, Inc. ( IL ), 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 IL.
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 revision. This trend has caused the consensus estimate to trend lower, going from an earnings of 9 cents a share a month ago to its current level at a loss of 1 cent.
Also, for the current quarter, IntraLinks has seen 2 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to a loss of 4 cents a share from earnings of 1 cent over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 15.6% 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 Business Software Services industry, you may instead consider some better-ranked stocks including Guidewire Software, Inc. ( GWRE ), Accelrys Inc. ( ACCL ) and SYNNEX Corp. ( SNX ). While Guidewire Software holds a Zacks Rank #1 (Strong Buy), Accelrys and SYNNEX carry a Zacks rank #2 (Buy). With favorable Zacks Rank, these stocks may be better selection at this time.
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ACCELRYS INC (ACCL): Free Stock Analysis Report
GUIDEWIRE SFTWR (GWRE): Free Stock Analysis Report
INTRALINKS HLDG (IL): Free Stock Analysis Report
SYNNEX CORP (SNX): Free Stock Analysis Report
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