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Should You Get Rid of Shoe Carnival (SCVL) Now?

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 Shoe Carnival Inc. (SCVL), 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 SCVL.
 
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 2 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 $1.41 a share a month ago to its current level of $1.25.
 
Also, for the current quarter, Shoe Carnival has seen 1 downward estimate revision versus np revisions in the opposite direction, dragging the consensus estimate down to 15 cents a share from 26 cents over the past 30 days.  
 
The stock also has seen some pretty dismal trading lately, as the share price has dropped 16.3% 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 retail sector, you may instead consider some better-ranked stocks including Citi Trends, Inc. (CTRN), American Apparel, Inc. (APP) and Foot Locker, Inc. (FL). While Citi Trends carries a Zacks Rank #1 (Strong Buy), American Apparel and Foot Locker carry a Zacks Rank #2 (Buy), and may be better selections at this time.
 
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SHOE CARNIVAL INC (SCVL): Free Stock Analysis Report

CITI TRENDS INC (CTRN): Free Stock Analysis Report

FOOT LOCKER INC (FL): Free Stock Analysis Report

AMERICAN APPAREL INC (APP): Free Stock Analysis Report


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