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 Buckeye Partners, L.P. BPL, 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 BPL.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen five 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 earnings of 10 cents a share a month ago to its current level of a loss of $2.76 per share.
Also, for the current quarter, Buckeye Partners has seen four downward estimate revisions versus one revision in the opposite direction, dragging the consensus estimate down to 73 cents a share from 79 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 12.6% in the past month.
Buckeye Partners L.P. Price and Consensus
Buckeye Partners L.P. Price and Consensus | Buckeye Partners L.P. 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 Oil and Gas - Production Pipeline - MLB industry, you may instead consider a better-ranked stock - TC PipeLines, LP TCP. 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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