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Tale of the Tape

Zacks Equity Research

Should You Get Rid of Frontline (FRO) Now?
September 23, 2016


Trades from $3

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 Frontline Ltd. (FRO - 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 #5 (Strong Sell) further confirms weakness in FRO.

A key reason for this move has been the negative trend in earnings estimate revisions. Though we have seen no estimate revisions in either direction in the past 30 days, the consensus estimate has been trending down, going from $1.80 a share a month ago to its current level of $1.23.

For the current quarter, Frontline has seen 2 downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to 9 cents a share from 21 cents over the past 30 days.  

The stock also has seen some pretty dismal trading lately, as the share price has dropped 11.8% in the past month.

FRONTLINE LTD Price and Consensus

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 Transportation-Ship industry, you may instead consider a better-ranked stock - Aegean Marine Petroleum Network Inc. (ANW - Snapshot Report) . The stock currently holds a Zacks Rank #1 (Strong Buy) and may be a better selection at this time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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