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 United States Steel Corp. ( X ), 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 X.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 4 estimates moving down in the past 30 days, compared to no upward revision. This trend has caused the consensus estimate to trend lower, going from a loss of 23 cents per share a month ago to its current level of a loss of 41 cents per share.
Also, for the current quarter, United States Steel has seen 3 downward estimate revisions versus 1 revision in the opposite direction, dragging the consensus estimate down to a loss of 69 cents a share from a loss of 64 cents per share over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 22.3% 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 Steel - Producers industry, you may instead consider a better-ranked stock - Schnitzer Steel Industries, Inc. ( SCHN ). The stock currently holds a Zacks Rank #1 (Strong Buy) and may be better selection at this time.