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 CVR Partners, LP (UAN - 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 #4 (Sell) further confirms weakness in UAN.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 1 estimate moving down in the past 60 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from 96 cents a share a month ago to its current level of 14 cents.
Also, for the current quarter, CVR Partners has seen 2 downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to a loss of 9 cents a share from 5 cents over the past 60 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 21.1% in the past month.
CVR PARTNERS LP 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 Basic Materials sector, you may instead consider a better-ranked stock - Eldorado Gold Corporation (EGO - Free Report) . The stock currently holds a Zacks Rank #2 (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.
Confidential from Zacks
Beyond this Tale of the Tape, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>