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What Falling Estimates & Price Mean for Devon Energy (DVN) - Tale of the Tape


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 Devon Energy Corporation (DVN), 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 DVN.
 
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 12 estimates moving down in the past 30 days, compared with just 1 upward revision. This trend has caused the consensus estimate to trend lower, going from $3.01 a share a month ago to its current level of $1.66.
 
Also, for the current quarter, Devon Energy has seen 7 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to 25 cents a share from 56 cents over the past 30 days.  
 
The stock also has seen some pretty dismal trading lately, as the share price has dropped 12.9% 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 U.S. oil export and production sector, you may instead consider a better-ranked stock - Antero Resources Corporation (AR). The stock currently holds a Zacks Rank #2 (Buy) and may be better selection at this time.
 
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
 


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
DEVON ENERGY (DVN): Free Stock Analysis Report
 
ANTERO RESOURCE (AR): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

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