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Why Cognex (CGNX) 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 Cognex CorporationCGNX , 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 CGNX.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen six 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 $1.40 a share a month ago to its current level of $1.15.

Also, for the current quarter, Cognex has seen four downward estimate revisions versus one revision in the opposite direction, dragging the consensus estimate down to 30 cents a share from 34 cents over the past 30 days.  

The stock also has seen some pretty dismal trading lately, as the share price has dropped 8.1% in the past month.

Cognex Corporation Price and Consensus

Cognex Corporation Price and Consensus | Cognex Corporation 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 Electronics - Testing Equipment industry, you may instead consider a better-ranked stock - AMETEK, Inc. AME . 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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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

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Cognex Corporation (CGNX): 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 Nasdaq, Inc.




This article appears in: Investing , Investing Ideas , Stocks
Referenced Symbols: AME , CGNX



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