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 Orchids Paper Products Company TIS , 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 TIS.
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 just no upward revisions. This trend has caused the consensus estimate to trend lower, going from earnings of 2 cents per share a month ago to its current level of loss of 26 cents.
Also, for the current quarter, Orchids Paper Products has seen one downward estimate revision versus no revision in the opposite direction, dragging the consensus estimate down to a loss of 5 cents a share from earnings of 19 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 9.5% in the past month.
Orchids Paper Products Company Price and Consensus
Orchids Paper Products Company Price and Consensus | Orchids Paper Products Company 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 Paper and Related Products industry, you may instead consider a better-ranked stock - Sappi Ltd. SPPJY . 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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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 Sappi Ltd. (SPPJY): Free Stock Analysis Report Orchids Paper Products Company (TIS): Free Stock Analysis Report To read this article on Zacks.com click here.