Back to top

Image: Bigstock

Why Installed Building Products, Inc. (IBP) Could Be Positioned for a Slump

Read MoreHide Full Article

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 Building Products, Inc. (IBP - Free 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 IBP.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen two estimates moving down in the past 30 days, compared with just no upward revisions. This trend has caused the consensus estimate to trend lower, going from $1.78 a share a month ago to its current level of $1.45.

Also, for the current quarter, Building Products has seen two downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to 38 cents a share from 47 cents over the past 30 days.  

The stock also has seen some pretty dismal trading lately, as the share price has dropped 11.04% in the past month.

Installed Building Products, Inc. Price and Consensus

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 Building Products - Miscellaneousindustry, you may instead consider a better-ranked stock - TopBuild Corp.(BLD - Free Report) . The stock currently holds a Zacks Rank #1 (Strong 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.

Sell These Stocks. Now.

Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.

See today's Zacks ""Strong Sells"" absolutely free >>.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


TopBuild Corp. (BLD) - free report >>

Installed Building Products, Inc. (IBP) - free report >>

Published in