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Weakness Seen in Sanchez Energy (SN) Estimates: Should You Stay Away?

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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 Sanchez Energy Corporation (SN - 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 SN.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 2 estimates moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus loss estimate to widen, going from a loss of $2.08 a share a month ago to its current level of a loss of $2.93.

Also, for the current quarter, Sanchez Energy has seen 1 downward estimate revision versus no revision in the opposite direction, widening the consensus loss estimate to a loss of 59 cents a share from a loss of 52 cents over the past 30 days.

The stock also has seen some pretty dismal trading lately, as the share price has dropped 17.5% 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 oil US export and production sector, you may instead consider a better-ranked stock - LRR Energy, L.P. . The stock currently holds a Zacks Rank #1 (Strong Buy) and may be better selection at this time.

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