Falling Earnings Estimates Signal Weakness Ahead for Big 5 Sporting Goods (BGFV)
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 Big 5 Sporting Goods Corporation BGFV, 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 BGFV.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen three estimates moving down in the past 30 days, compared with just no upward revisions. This trend has caused the consensus estimate to trend lower, going from $1.23 a share a month ago to its current level of 96 cents.
Also, for the current quarter, Basic Energy Services has seen one downward estimate revision versus no revision in the opposite direction, dragging the consensus estimate down to 28 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 37.9% in the past month.
Big 5 Sporting Goods Corporation Price and Consensus
Big 5 Sporting Goods Corporation Price and Consensus | Big 5 Sporting Goods Corporation Quote
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 Retail - Miscellaneousindustry, you may instead consider a better-ranked stock - Sally Beauty Holdings, Inc. SBH. The stock currently holds a Zacks Rank #1 (Strong Buy) and may be a better selection at this time. You can see the complete list of today’s Zacks #1 Rank stocks here.
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