Why Parker Drilling (PKD) Could Be Positioned for a Slump
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 Parker Drilling Co. (PKD), 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 PKD.
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 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from 41 cents a share a month ago to its current level of 30 cents.
Also, for the current quarter, Parker Drilling has seen 2 downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to 4 cents a share from 14 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 12.4% 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 and gas sector, you may instead consider some better-ranked stocks including Spirit AeroSystems Holdings, Inc. (SPR), Atlas Resource Partners, L.P. (ARP) and Cheniere Energy, Inc. (LNG). While Spirit AeroSystems holds a Zacks Rank #1 (Strong Buy), Atlas Resource and Cheniere Energy carry a Zacks Rank #2 (Buy).
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PARKER DRILLING CO (PKD): Free Stock Analysis Report
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