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 Accuray Incorporated ( ARAY ), 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 ARAY.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 3 estimates moving down in the past 30 days, compared with no upward revision. This trend has caused the consensus loss estimate to wisen, going from a loss of 22 cents a share a month ago to its current loss of 31 cents.
Also, for the current quarter, Accuray has seen 2 downward estimate revisions versus no revision in the opposite direction, widening the consensus loss estimate from a loss of 5 cents share to a loss of 6 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 12.4% 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 healthcare sector, you may instead consider some better-ranked stocks including AngioDynamics Inc. ( ANGO ), ABIOMED, Inc. ( ABMD ) and DexCom, Inc. ( DXCM ). While AngioDynamics holds a Zacks Rank #1 (Strong Buy), both ABIOMED and DexCom hold a Zacks Rank #2 (Buy) and may be better selections at this time.