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Why GAIN Capital (GCAP) Could Be Positioned for a Slump
May 17, 2017

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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 GAIN Capital Holdings, Inc. (GCAP - 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 GCAP.

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 estimate to trend lower, going from 69 cents a share a month ago to its current level of 9 cents.

Also, for the current quarter, GAIN Capital has seen 2 downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to 15 cents a share from 25 cents over the past 30 days.  

The stock also has seen some pretty dismal trading lately, as the share price has dropped 20.5% 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 Financial - Investment Bank industry, you may instead consider a better-ranked stock - Investment Technology Group, Inc. (ITG - Free Report) . The stock currently holds a Zacks Rank #1 (Strong Buy) and may be a better selection at this time.

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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

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Investment Technology Group, Inc. (ITG) - free report >>

GAIN Capital Holdings, Inc. (GCAP) - free report >>


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