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 Expedia, Inc.EXPE , 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 EXPE.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 10 estimates moving down in the past 30 days, compared with just one upward revision. This trend has caused the consensus estimate to trend lower, going from $5.37 a share a month ago to its current level of $4.85.
Also, for the current quarter, Expedia has seen five downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to a loss of 27 cents a share from earnings of 9 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 14.7% in the past month.
Expedia, Inc. Price and Consensus
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 Internet - Commerce industry, you may instead consider a better-ranked stock - PetMed Express, Inc. PETS . The stock currently holds a Zacks Rank #1 (Strong Buy) and may be a better selection at this time. You can see the complete list of today's Zacks #1 Rank stocks here .
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.