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 FedEx Corporation FDX, 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 FDX.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 11 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 $17.34 per share a month ago to its current level of $15.90 per share.
Also, for the current quarter, FedEx has seen eight downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to $3.11 per share from $3.77 per share over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 29.9% in the past month.
FedEx Corporation Price and Consensus
FedEx Corporation Price and Consensus | FedEx 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 Transportation sector, you may instead consider a better-ranked stock - American Airlines Group Inc. AAL. The stock currently holds a Zacks Rank #2 (Buy) and may be a better selection at this time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
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
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
FedEx Corporation (FDX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research