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Falling Earnings Estimates Signal Weakness Ahead for Cross Country Healthcare (CCRN)

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 Cross Country Healthcare, Inc. (CCRN), 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 CCRN.

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 11 cents a share a month ago to its current level of 9 cents.

Also, for the current quarter, Cross Country Healthcare has seen 2 downward estimate revisions versus no revision in the opposite direction, though the consensus estimate of 2 cents per share remained same over the past 1 month.    

The stock also has seen some pretty dismal trading lately, as the share price has dropped 12.32% 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 Business Services sector, you may instead consider some better-ranked stocks including ManpowerGroup Inc. (MAN), Convergys Corporation (CVG) and Kforce Inc. (KFRC). While ManpowerGroup and Convergys hold a Zacks Rank #1 (Strong Buy), Kforce holds a Zacks Rank #2 (Buy), and may be better selections at this time.

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CROSS COUNTRY INC (CCRN): Free Stock Analysis Report

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