Back to top

Falling Earnings Estimates Signal Weakness Ahead for FXCM (FXCM)
July 18, 2014

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 FXCM 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 FXCM.

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 46 cents a share a month ago to its current level of 40 cents.

Also, for the current quarter, FXCM has seen 1 downward estimate revision versus no revision in the opposite direction, dragging the consensus estimate down to 4 cents a share from 5 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 12.86% 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 Financial sector, you may instead consider some better-ranked stocks including AeroCentury Corp. (ACY - Free Report) , AerCap Holdings N.V. (AER - Free Report) and Ashford Hospitality Trust, Inc. (AHT - Free Report) . All these stocks hold a Zacks Rank #1 (Strong Buy) and may be better selections at this time.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

In-Depth Zacks Research for the Tickers Above

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

AeroCentury Corp. (ACY) - free report >>

Aercap Holdings N.V. (AER) - free report >>

Ashford Hospitality Trust Inc (AHT) - free report >>

More from Zacks Tale of the Tape

You May Like