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 Stage Stores Inc. ( SSI ), 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 SSI.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 6 estimates moving down in the past 30 days, compared with no upward revision. This trend has caused the consensus estimate to trend lower, going from $1.24 a share a month ago to its current level of 99 cents.
Also, for the current quarter, Stage Stores has seen 4 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to a loss of 17 cents a share from a loss of 13 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 35.2% 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 Retail-Apparel sector, you may instead a better-ranked stock Foot Locker, Inc. ( FL ) with a Zacks Rank #1 (Strong Buy).
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 >>
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