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 Bebe Stores, Inc. (BEBE), 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 BEBE.
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 with no upward revisions. This trend has caused the consensus estimate to trend lower, going from a loss of 67 cents a share a month ago to its current level of a loss of 68 cents.
Also, for the current quarter, Bebe has seen 1 downward estimate revision versus no revisions in the opposite direction, dragging the consensus estimate down to a loss of18 cents a share from a loss of 17 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 11.8% 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 retail sector, you may instead consider some better-ranked stocks including Christopher & Banks Corporation (CBK), Citi Trends, Inc. (CTRN) and The Men's Wearhouse, Inc. (MW). All these stocks hold a Zacks Rank #1 (Strong Buy) and may be better selections at this time.
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BEBE STORES INC (BEBE): Free Stock Analysis Report
CHRISTOPHER & BANKS CORP (CBK): Free Stock Analysis Report
CITI TRENDS INC (CTRN): Free Stock Analysis Report
MENS WEARHOUSE INC (MW): Free Stock Analysis Report
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