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 Vitesse Semiconductor Corp. (VTSS), 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 VTSS.
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 revision. This trend has caused the consensus estimate to trend lower, going from a loss of 22 cents a share a month ago to its current level of a loss of 27 cents.
Also, for the current quarter, Vitesse Semiconductor has seen 1 downward estimate revisions versus 1 revision in the opposite direction, dragging the consensus estimate down to a loss of 3 cents a share from a loss of 2 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 10.1% 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 Semiconductor sector, you may instead consider some better-ranked stocks including AXT Inc. (AXTI), NVE Corp. (NVEC) and Silicon Motion Technology Corp. (SIMO). All these stocks hold a Zacks Rank #1 (Strong Buy) and may be better selections at this time.
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VITESSE SEMICONDUCTOR CORP (VTSS): Free Stock Analysis Report
AXT INC (AXTI): Free Stock Analysis Report
NVE CP (NVEC): Free Stock Analysis Report
SILICON MOTION TECHNOLOGY CORP (SIMO): Free Stock Analysis Report
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