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Why Olin (OLN) Could Be Positioned for a Slump

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 Olin Corporation OLN, 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 OLN.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen four estimates moving down in the past 30 days, compared with one upward revision. This trend has caused the consensus estimate to trend lower, going from 98 cents per share a month ago to its current level of 76 cents.

Also, for the current quarter, Olin has seen four downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to a loss of 10 cents a share from earnings of 21 cents over the past 30 days.

The stock also has seen some pretty dismal trading lately, as the share price has dropped 10.4% in the past month.

Olin Corporation Price and Consensus

Olin Corporation Price and Consensus

Olin Corporation price-consensus-chart | Olin Corporation Quote

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 Chemical – Diversified industry, you may instead consider a better-ranked stock - Northern Technologies International Corporation NTIC. 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.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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