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Why Kforce (KFRC) Could Be Positioned for a Slump
August 21, 2014
KFRC AHS HSII
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 Kforce Inc. ( KFRC - 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 #4 (Sell) further confirms weakness in KFRC.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 6 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 $1.23 a share a month ago to its current level of $1.09.
Also, for the current quarter, Kforce has seen 6 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to 28 cents a share from 36 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 11.7% 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 Staffing sector, you may instead consider some better-ranked stocks including CTPartners Executive Search Inc. , AMN Healthcare Services Inc. ( AHS - Snapshot Report) and Heidrick & Struggles International Inc. ( HSII - Snapshot Report) . While CTPartners Executive Search holds a Zacks Rank #1 (Strong Buy), AMN Healthcare Services and Heidrick & Struggles International hold a Zacks Rank #2 (Buy) and may be better selections at this time.
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