What Makes DSW Inc. (DSW) a Strong Sell? - 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 DSW Inc. ( DSW ), 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 DSW.
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 revisions. This trend has caused the consensus estimate to trend lower, going from $1.89 a share a month ago to its current level of $1.51 per share.
Also, for the current quarter, DSW Inc. has seen 4 downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to 34 cents a share from 47 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 21.2% 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 Footwear sector, you may instead consider some better-ranked stocks including American Apparel, Inc. ( APP ), Foot Locker, Inc. ( FL ) and Zumiez, Inc. ( ZUMZ ). All these stocks hold a Zacks Rank #2 (Buy) and may be better selections at this time.
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DSW INC CL-A (DSW): Free Stock Analysis Report
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