One such stock that you may want to consider dropping is Wet Seal Inc. (WTSL) 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 WTSL.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 5 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 a loss of 26 cents a share a month ago to its current level of a loss of 32 cents.
Also, for the current quarter, Wet Seal has seen 3 downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to a loss of 24 cents a share from a loss of 16 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 11.4% 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 consumer goods sector, you may instead consider some better-ranked stocks including Christopher & Banks Corporation (CBK), Belle International Holdings Limited (BELLY) and Li Ning Company Limited (LNNGY). While Belle International Holdings and Li Ning Company Limited carry a Zacks Rank #2 (Buy), Christopher & Banks holds a Zacks Rank #1 (Strong Buy) and may be better selections at this time.
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