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Falling Earnings Estimates Signal Weakness Ahead for Raven (RAVN)

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 Raven Industries Inc. (RAVN), 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 RAVN.

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, with no upward revision. This trend has caused the consensus estimate to trend lower, going from $1.41 a share a month ago to its current level of $1.21.

Also, for the current quarter, Raven has seen 1 downward estimate, with no revision in the upside, dragging the consensus estimate down to 34 cents a share from 43 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 10% 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 Conglomerates sector, you may instead consider some better-ranked stocks including Federal Signal Corp. (FSS), Noble Group Limited (NOBGY) and Sumitomo Corporation (SSUMY). All these of these carry a Zacks Rank #1 (Strong Buy) and may be better selections at this time.

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RAVEN INDUSTRIES INC (RAVN): Free Stock Analysis Report

FEDERAL SIGNAL CORP (FSS): Free Stock Analysis Report

NOBLE GROUP LTD ADR (NOBGY): Free Stock Analysis Report

SUMITOMO CORP SP ADR (SSUMY): Free Stock Analysis Report

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