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 Magnum Hunter Resources Corp. (MHR), 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 MHR.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 1 estimate moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from a loss of 51 cents a share a month ago to its current level of a loss of 78 cents.
Also, for the current quarter, Magnum Hunter Resources has seen 1 downward estimate revision versus no revisions in the opposite direction, dragging the consensus estimate down to a loss of 21 cents a share from a loss of 14 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 23.7% 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 same sector, you may instead consider some better-ranked stocks including VOC Energy Trust (VOC), Midstates Petroleum Company, Inc. (MPO) and RSP Permian, Inc. (RSPP). All these stocks hold 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 >>
MAGNUM HUNTER RESOURCES CORP (MHR): Free Stock Analysis Report
VOC ENERGY TRUST (VOC): Free Stock Analysis Report
(RSPP): Free Stock Analysis Report
MIDSTATES PETROLEUM CO INC (MPO): Free Stock Analysis Report
Zacks Investment Research
- Investment & Company Information