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 Francesca's Holdings Corporation FRAN, 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 FRAN.
A key reason for this move has been the negative trend in earnings estimates revisions. For the full year, we have seen two 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 57 cents a share a month ago to its current level of 15 cents.
Also, for the current quarter, Francesca's has seen one downward estimate revision versus no revisions in the opposite direction, dragging the consensus estimate down to a loss of 3 cents a share from earnings of 9 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 38.9% in the past month.
Francesca's Holdings Corporation Price and Consensus
Francesca's Holdings Corporation Price and Consensus | Francesca's Holdings 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 Shoe and Retail Apparel industry, you may instead consider a better-ranked stock - Rocky Brands, Inc. RCKY. 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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