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 Stemline Therapeutics, Inc. (STML), 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 STML.
A key reason for this move has been the negative trend in earnings estimate revisions. Though the current year has seen a flat track record for earnings estimates, the current quarter loss estimates have widened.
For the current quarter, Stemline Therapeutics has seen 2 downward estimate revisions versus no change in the opposite direction, widening the consensus estimate to a loss of 72 cents a share from a loss of 46 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 25.3% 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 biopharmaceutical sector, you may instead consider some better-ranked stocks including Affymetrix Inc. (AFFX), Allergan Inc. (AGN) and Alexion Pharmaceuticals, Inc. (ALXN). All these stocks hold a Zacks Rank #2 (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 >>
STEMLINE THERAPEUTICS INC (STML): Free Stock Analysis Report
ALLERGAN INC (AGN): Free Stock Analysis Report
AFFYMETRIX INC (AFFX): Free Stock Analysis Report
ALEXION PHARMACEUTICALS INC (ALXN): Free Stock Analysis Report
Zacks Investment Research