Back to top

Image: Bigstock

Weakness Seen in Sigma Designs (SIGM) Estimates: Should You Stay Away?

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 Sigma Designs, 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 #4 (Sell) further confirms weakness in SIGM.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen one estimate moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from a loss of 43 cents a share a month ago to its current level of a loss of 85 cents.

Also, for the current quarter, Sigma Designs has seen one downward estimate revision versus no revisions in the opposite direction, dragging the consensus estimate down to a loss of 22 cents a share from a loss of 9 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 8.5% in the past month.

Sigma Designs, 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 Computer and Technology sector, you may instead consider a better-ranked stock – Coherent, Inc. (COHR). 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 stocks here.

3 Stocks to Ride a 588% Revenue Explosion

At Zacks, we're mostly focused on short-term profit cycles, but the hottest of all technology mega-trends is starting to take hold...

By last year, it was already generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for those who make the right trades early. See Zacks' Top 3 Stocks to Ride This Space >>

Published in