What Falling Estimates & Price Mean for Ring Energy (REI) - 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 Ring Energy, Inc. (REI), 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 REI.
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 60 days, compared with no upward revision. This trend has caused the consensus estimate to trend lower, going from 32 cents a share two months ago to its current level of 28 cents.
Also, for the current quarter, Ring Energy has seen 1 downward estimate revision versus no revision in the opposite direction, dragging the consensus estimate down to 6 cents a share from 10 cents over the past 60 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 19.9% 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 oil US export and production sector, you may instead consider a better-ranked stock - Midstates Petroleum Company, Inc. (MPO). 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
RING ENERGY INC (REI): Free Stock Analysis Report
MIDSTATES PETRO (MPO): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
