Falling Earnings Estimates Signal Weakness Ahead for Real Goods Solar (RGSE)
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 Real Goods Solar, Inc. (RGSE) 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 RGSE.
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 30 days, compared to no upward revision. This trend has caused the consensus estimate to trend lower, going from a loss of 22 cents a share a month ago to its current level of a loss of 31 cents.
Also, for the current quarter, Real Goods Solar has seen 1 downward estimate revision versus no revision in the opposite direction, dragging the consensus estimate down to a loss of 13 cents per share from a loss of 9 cents a share over the past 30 days.
The stock has also seen some pretty dismal trading lately, as the share price has dropped 28.0% 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 Solar industry, you may instead consider some better-ranked stocks including Canadian Solar Inc. (CSIQ), JinkoSolar Holding Co., Ltd. (JKS) and ReneSola Ltd. (SOL). While Canadian Solar carries a Zacks Rank #1 (Strong Buy), JinkoSolar and ReneSola hold a Zacks Rank #2 (Buy). With favorable Zacks Ranks, these stocks may be better selections at this time.
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REAL GOODS SOLAR CL A (RGSE): Free Stock Analysis Report
CANADIAN SOLAR INC (CSIQ): Free Stock Analysis Report
RENESOLA LTD (SOL): Free Stock Analysis Report
JINKOSOLAR HOLDINGS CO (JKS): Free Stock Analysis Report
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