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 Spartan Motors Inc. (SPAR), 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 SPAR.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 3 estimates moving down in the past 30 days, with no upward revision. This trend has caused the consensus estimate to trend lower, going from 9 cents a share a month ago to its current level of 6 cents.
Also, for the current quarter, Spartan Motors's has seen 2 downward estimates revision versus no revision in the upside, the consensus estimate also widens to a loss of 2 cents a share from a loss of 1 cent over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 10.8% 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 Auto-Tires-Trucks sector, you may instead consider some better-ranked stocks including Gentherm Incorporated (THRM), Modine Manufacturing Company (MOD) and Accuride Corp. (ACW). While Gentherm and Modine Manufacturing carry a Zacks Rank #1 (Strong Buy), Accuride holds a Zacks Rank #2 (Buy).
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SPARTAN MOTORS INC (SPAR): Free Stock Analysis Report
GENTHERM INC (THRM): Free Stock Analysis Report
MODINE MANUFACTURING CO (MOD): Free Stock Analysis Report
ACCURIDE CORP (ACW): Free Stock Analysis Report
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