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Should You Get Rid of Silver Spring (SSNI) Now?
February 12, 2014
SSNI ADSK BRCD
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 Silver Spring Networks, Inc. ( SSNI - 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 SSNI.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 3 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 86 cents a share a month ago to its current level of 49 cents.
Also, for the current quarter, Silver Spring has seen 1 downward estimate revision versus no revision in the opposite direction, dragging the consensus estimate down to a loss of 6 cents a share from 15 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 26.4% 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 computer network sector, you may instead consider some better-ranked stocks including Autodesk, Inc. ( ADSK - Analyst Report) , Brocade Communications Systems, Inc. ( BRCD - Snapshot Report) and Riverbed Technology, Inc. . While Autodesk carries a Zacks Rank #1 (Strong Buy), Brocade Communications and Riverbed Technology holds a Zacks Rank #2 (Buy) and may be better selections at this time.
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