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Tale of the Tape

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 Mattel, Inc. (MAT - Analyst Report), 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 MAT.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 8 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 $2.97 a share a month ago to its current level of $2.64.

Also, for the current quarter, Mattel has seen 4 downward estimate revisions versus just 2 revisions in the opposite direction, dragging the consensus estimate down to 8 cents a share from 12 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 18.8% 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 Toys and Games industry, you may instead consider better-ranked stocks like Glu Mobile, Inc. (GLUU - Snapshot Report) and Take-Two Interactive Software Inc. (TTWO - Snapshot Report). While Glu sports a Zacks Rank #1(Strong Buy), Take-Two Interactive holds a Zacks Rank #2 (Buy). Meanwhile, in the broader consumer discretionary sector one can consider the Zacks Ranked #1 stock Carnival Corporation (CCL - Analyst Report).

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