Why Big 5 Sporting Goods (BGFV) Could Be Positioned for a Slump - Tale of the Tape
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 Big 5 Sporting Goods Corp. ( BGFV ), 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 #4 (Sell) further confirms weakness in BGFV.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 5 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 $1.14 a share a month ago to its current level of $1.02.
Also, for the current quarter, Big 5 Sporting Goods has seen 4 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate to 17 cents a share from 28 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 20.27% 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 Retail sector, you may instead consider some better-ranked stocks including Kingfisher plc ( KGFHY ), Office Depot, Inc. ( ODP ) and ITOCHU Corporation ( ITOCY ). Among these stocks, Kingfisher holds a Zacks Rank #1 (Strong Buy) and Office Depot and ITOCHU hold a Zacks Rank #2 (Buy). With favorable Zacks Rank, these stocks may be better selections at this time.
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BIG 5 SPORTING (BGFV): Free Stock Analysis Report
ITOCHU CORP (ITOCY): Get Free Report
KINGFISHER -ADR (KGFHY): Get Free Report
OFFICE DEPOT (ODP): Free Stock Analysis Report
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