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 MagnaChip Semiconductor Corporation (MX), 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 MX.
A key reason for this move has been the negative trend in consensus estimate. For the full year, we have seen no estimate revision in the past 30 days, but the consensus estimate has fallen, going from $2.25 a share a month ago to its current level of $2.17 a share.
Also, for the current quarter, MagnaChip has seen no estimate revisions, but the consensus estimate has moved down to 15 cents a share from 29 cents a share over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 10.2% 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 Semiconductor industry, you may instead consider some better-ranked stocks including Montage Technology Group Limited (MONT), CSR plc (CSRE) and Inphi Corporation (IPHI). While Montage Technology holds a Zacks Rank #1 (Strong Buy), CSR and Inphi carry a Zacks Rank #2 (Buy). With favorable Zacks Ranks, these stocks may be better selections at this time.
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MAGNACHIP SEMICONDUCTOR CORP (MX): Free Stock Analysis Report
MONTAGE TECH GROUP LTD ORD (MONT): Free Stock Analysis Report
CSR PLC (CSRE): Free Stock Analysis Report
INPHI CORP (IPHI): Free Stock Analysis Report
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