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Why Neptune Technologies (NEPT) Could Be Positioned for a Slump

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 Neptune Technologies & Bioressources, Inc. (NEPT), 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 NEPT.
 
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 1 estimate moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from a loss of 31 cents a share a month ago to its current level of a loss of 35 cents.
 
Also, for the current quarter, Neptune Technologies has seen 1 downward estimate revision versus no revisions in the opposite direction, dragging the consensus estimate down to a loss of 11 cents a share from a loss of 8 cents over the past 30 days.  
 
The stock also has seen some pretty dismal trading lately, as the share price has dropped 18.1% 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 medical sector, you may instead consider some better-ranked stocks including Salix Pharmaceuticals Ltd. (SLXP), United Therapeutics Corporation (UTHR), each holding a Zacks Rank #1 (Strong Buy) and Endo International plc (ENDP), with a Zacks Rank #2 (Buy). All these stocks may be better selections at this time.
 
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NEPTUNE TECH & BIORESOURCES ORD (NEPT): Free Stock Analysis Report

SALIX PHARMACEUTICALS LTD (SLXP): Free Stock Analysis Report

UNITED THERAPEUTICS CP (UTHR): Free Stock Analysis Report

ENDO INTERNATIONAL PLC ORD (ENDP): Free Stock Analysis Report


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