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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 ViaSat Inc. (VSAT - Snapshot 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 VSAT.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 2 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 $1.09 a share a month ago to its current level of 28 cents.

Also, for the current quarter, ViaSat has seen 1 downward estimate revision versus no revision in the opposite direction, dragging the loss estimate down to 3 cents from earnings of 13 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 12.05% 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 Wireless Equipment industry, you may instead consider some better-ranked stocks including Polycom, Inc. (PLCM - Analyst Report), InterDigital, Inc. (IDCC - Snapshot Report) and Juniper Networks, Inc. (JNPR - Analyst Report). Among these stocks Polycom holds a Zacks Rank #1 (Strong Buy) and InterDigital and Juniper hold a Zacks Rank #2 (Buy). With favorable Zacks Ranks, these stocks may be better selections at this time.

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