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 .
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>
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 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.