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Weakness Seen in Vera Bradley (VRA) Estimates: Should You Stay Away?
June 27, 2014

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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 Vera Bradley, Inc. (VRA - 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 #4 (Sell) further confirms weakness in VRA.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 5 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 $1.26 a share a month ago to its current level of $1.10.

Also, for the current quarter, Vera Bradley has seen 6 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to 19 cents a share from 31 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 17.61% 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 Retail Apparel/Shoe sector, you may instead consider some better-ranked stocks including Citi Trends Inc. , Christopher & Banks Corporation (CBK - Free Report) and The Men’s Wearhouse Inc. . While Citi Trends and Christopher & Banks carry a Zacks Rank #1 (Strong Buy), The Men’s Wearhouse carries a Zacks Rank #2 (Buy) and may be better selections at this time

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