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 Beacon Roofing Supply, Inc.BECN , 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 BECN.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 11 estimates moving down in the past 30 days, compared with just none upward revisions. This trend has caused the consensus estimate to trend lower, going from $3.39 a share a month ago to its current level of $3.07.
Also, for the current quarter, Beacon Roofing Supply has seen 11 downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to $1.38 a share from $1.58 over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 8.9% in the past month.
Beacon Roofing Supply, 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 Building Products - Retail industry, you may instead consider a better-ranked stock - Fastenal Company FAST . 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 .
Best Electric Car Stock? You'll Never Guess It.
Zacks Research has released a report that may shock many investors. One stock stands out as the best way to invest in the surge to electric cars. And it's not the one you may think!
Much like petroleum 150 years ago, lithium battery power is set to shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge. With battery prices plummeting and charging stations set to multiply, revenues that were already at $31 billion in 2016 are expected to blast to over $67 billion by the end of 2022.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.