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Tale of the Tape

Zacks Equity Research

Should You Get Rid of Conagra Brands (CAG) Now?
November 22, 2016

GIS CAG

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 Conagra Brands, Inc. (CAG - 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 CAG.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 4 estimates moving down in the past 30 days, compared with no upward revision. This trend has caused the consensus estimate to trend lower, going from $2.48 a share a month ago to its current level of $1.69.

Also, for the current quarter, Conagra Brands has seen 3 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to 44 cents a share from 65 cents over the past 30 days.  

The stock also has seen some pretty dismal trading lately, as the share price has dropped 22.5% in the past month.

CONAGRA BRANDS Price and Consensus

CONAGRA BRANDS Price and Consensus | CONAGRA BRANDS 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 Food-Miscellaneous industry, you may instead consider a better-ranked stock - General Mills, Inc. (GIS - 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.

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