What Makes Owens Corning (OC) a Strong Sell? - 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 Owens Corning ( OC ), 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 OC.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 13 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 $2.34 a share a month ago to its current level of $1.99.

Also, for the current quarter, Owens Corning has seen 13 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to 47 cents from 74 cents a share over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 11.21% 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 Building & Construction-Miscellaneous industry, you may instead consider some better-ranked stocks including James Hardie Industries plc ( JHX ), QuanexBuilding Products Corporation ( NX ) and Simpson Manufacturing Co., Inc. ( SSD ). All these stocks hold a Zacks Rank #2 (Buy) and may be better selections at this time.

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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

OWENS CORNING (OC): Free Stock Analysis Report

JAMES HARDI-ADR (JHX): Free Stock Analysis Report

QUANEX BLDG PRD (NX): Free Stock Analysis Report

SIMPSON MFG INC (SSD): 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: OC , JHX , NX , SSD

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