Weakness Seen in Intelsat (I) Estimates: Should You Stay Away?

Zacks Equity Research

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 Intelsat S.A. (I), 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 I.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 7 estimates moving down in the past 30 days, compared to only 1 upward revision. This trend has caused the consensus estimate to trend lower, going from $2.66 a share a month ago to its current level at $2.36.

Also, for the current quarter, Intelsat has seen 4 downward estimate revisions versus 1 revision in the opposite direction, dragging the consensus estimate to 55 cents a share from 63 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 12.7% 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 Telecommunication sector, you may instead consider some better-ranked stocks including ARC Group Worldwide, Inc. (ARCW), Harris Corporation (HRS) and Nokia Corporation (NOK). All these stocks carry a Zacks Rank #2 (Buy) and may be better selections at this time.

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(I): Free Stock Analysis Report

NOKIA CORP (NOK): Free Stock Analysis Report

HARRIS CORP (HRS): Free Stock Analysis Report

ARC GROUP WORLDWIDE INC (ARCW): Free Stock Analysis Report


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