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 Fuel Systems Solutions, Inc. (FSYS), 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 FSYS.
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, with no upward revision. This trend has caused the consensus estimate to trend lower, going from 23 cents a share a month ago to its current level of 5 cents.
Also, for the current quarter, Fuel Systems Solutions has seen 4 downward estimate revisions versus no revision in the upside, dragging the consensus estimate down to a loss of 4 cents a share from a gain of 3 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 15% 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 Auto sector, you may instead consider some better-ranked stocks including Gentherm Incorporated (THRM), STRATTEC Security Corporation (STRT) and Valeo SA (VLEEY). All these of these carry a Zacks Rank #1 (Strong Buy) and may be better selections 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 >>
FUEL SYSTEMS SOLUTIONS INC (FSYS): Free Stock Analysis Report
GENTHERM INC (THRM): Free Stock Analysis Report
STRATTEC SECURITY CP (STRT): Free Stock Analysis Report
VALEO SA SPONS ADR (VLEEY): Free Stock Analysis Report
Zacks Investment Research