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What Makes Rayonier (RYN) a Strong Sell?

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 Rayonier Inc. (RYN), 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 RYN.

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, compared with no upward revision. This trend has caused the consensus estimate to trend lower, going from $1.87 a share a month ago to its current level of $1.31.

Also, for the current quarter, Rayonier has seen 1 downward estimate revision versus no revision in the opposite direction, dragging the consensus estimate down to 47 cents a share from 48 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 26.5% 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 broader Construction sector, you may instead consider some better-ranked stocks including Nortek Inc. (NTK), Willdan Group, Inc. (WLDN) and Watsco Inc. (WSO). All these stocks hold a Zacks Rank #1 (Strong Buy) and may be better selections at this time.

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RAYONIER INC (RYN): Free Stock Analysis Report

NORTEK INC (NTK): Free Stock Analysis Report

WILLDAN GROUP INC (WLDN): Free Stock Analysis Report

WATSCO INC (WSO): Free Stock Analysis Report

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