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Why CAI International (CAI) Could Be Positioned for a Slump

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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 CAI International Inc. , 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 CAI.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 4 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 $1.62 a share a month ago to its current level of $1.17.

Also, for the current quarter, CAI International has seen 3 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to 29 cents a share from 45 cents over the past 30 days.  

The stock also has seen some pretty dismal trading lately, as the share price has dropped 11.2% in the past month.

CAI INTL INC Price and Consensus

CAI INTL INC Price and Consensus | CAI INTL INC 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 Transportation sector, you may instead consider a better-ranked stock - Aegean Marine Petroleum Network Inc. .The stock currently holds a Zacks Rank #1 (Strong Buy) and may be a better selection at this time.

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