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Weakness Seen in Ring Energy (REI) Estimates: Should You Stay Away?

Zacks Equity Research
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Looking for Value? Why It Might Be Time to Try Archer-Daniels-Midland (ADM)

Archer-Daniels-Midland (ADM) seems to be a good value pick, as it has decent revenue metrics to back up its earnings, and is seeing solid earnings estimate revisions as well.

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 Ring Energy, Inc. REI, 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 REI.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen eight estimates moving down in the past 60 days, compared with no upward revisions. This has caused the consensus estimate to trend lower, going from 58 cents a share to its current level of 48 cents, over a period of 60 days.

Also, for the current quarter, Ring Energy has seen six downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to 13 cents a share from 16 cents over the past 60 days.   

The stock has also seen some pretty dismal trading lately, as the share price has dropped 12.3% in the past month.

Ring Energy, Inc. Price and Consensus

Ring Energy, Inc. Price and Consensus | Ring Energy, Inc. 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 - Exploration and Production - United States industry, you may instead consider a better-ranked stock - CNX Resources Corporation CNX. 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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CNX Resources Corporation. (CNX) : Free Stock Analysis Report
 
Ring Energy, Inc. (REI) : Free Stock Analysis Report
 
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