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What Makes Louisiana-Pacific (LPX) a Strong Sell?

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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 Louisiana-Pacific Corp. (LPX - 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 #5 (Strong Sell) further confirms weakness in LPX.

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 revision. This trend has caused the consensus loss estimate to widen, going from a loss of 10 cents a share a month ago to its current loss level of 13 cents.

Also, for the current quarter, Louisiana-Pacific has seen one downward estimate revision versus one revision in the opposite direction, keeping the consensus loss estimate of 3 cents flat over the past 30 days.

The stock also has seen some pretty dismal trading lately, as the share price has dropped 12.3% 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 Building Production – Wood industry, you may instead consider some better-ranked stocks including Boise Cascade Company (BCC), Weyerhaeuser Co. (WY) and Potlatch Corporation (PCH). While Boise Cascade and Weyerhaeuser hold a Zacks Rank #1 (Strong Buy), Potlatch carries a Zacks Rank #2 (Buy). All these stocks may be better selections at this time.

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