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 Iao Kun Group Holding Company Limited (IKGH), 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 IKGH.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen one estimate moving down in the past 30 days, compared with no upward revision. This trend has caused the consensus estimate to trend lower, going from 39 cents a share a month ago to its current level of 25 cents.
Also, for the current quarter, Iao Kun Group has seen one downward estimate revision versus no revision in the opposite direction, dragging the consensus estimate down to 5 cents a share from 7 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 11.8% 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 Gaming industry, you may instead consider 500.com Limited (WBAI), which holds a Zacks Rank #1 (Strong Buy). Moreover, if you are interested in the Consumer Discretionary sector, you may consider some better-ranked stocks including Deckers Outdoor Corp. (DECK) and Pearson plc (PSO). Both these stocks hold a Zacks Rank #1 (Strong Buy) and may be better selections at this time.
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