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Why Teekay Offshore (TOO) Could Be Positioned for a Slump


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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 Teekay Offshore Partners L.P. TOO , 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 TOO.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen one estimate moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from earnings of 31 cents a share a month ago to its current level of a loss of 99 cents.

Also, for the current quarter, Teekay Offshore Partners has seen one downward estimate revision versus no revisions in the opposite direction, dragging the consensus estimate down to 10 cents a share from 19 cents over the past 30 days.  

The stock also has seen some pretty dismal trading lately, as the share price has dropped 14.1% in the past month.

Teekay Offshore Partners L.P. Price and Consensus

Teekay Offshore Partners L.P. Price and Consensus | Teekay Offshore Partners L.P. Quote

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 Transportation sector, you may instead consider a better-ranked stock - Dorian LPG Ltd. LPG . The stock currently holds a Zacks Rank #2 (Buy) and may be a better selection at this time. You can see  the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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Dorian LPG Ltd. (LPG): Free Stock Analysis Report

Teekay Offshore Partners L.P. (TOO): Free Stock Analysis Report

To read this article on Zacks.com click here.

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: LPG , TOO


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