Back to top

Tale of the Tape

Zacks Equity Research

What Makes Healthways (HWAY) a Strong Sell?
November 21, 2016

HWAY

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 Healthways, Inc. (HWAY - 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 HWAY.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 3 estimates moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from $2.11 a share a month ago to its current level of $1.74.

Also, for the current quarter, Healthways has seen 5 downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to 37 cents a share from 52 cents over the past 30 days.  

The stock also has seen some pretty dismal trading lately, as the share price has dropped 14.8% in the past month.

HEALTHWAYS INC Price and Consensus

HEALTHWAYS INC Price and Consensus | HEALTHWAYS INC Quote

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 Medical Services industry, you may instead consider a better-ranked stock - Quintiles IMS Holdings, Inc. (Q). 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.

Zacks’ Best Private Investment Ideas

While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.

Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>

In-Depth Zacks Research for the Tickers Above

HEALTHWAYS INC (HWAY) - FREE report >>