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 The Men's Wearhouse, Inc. (MW), 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 MW.
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 $3.05 a share a month ago to its current level of $2.62.
Also, for the current quarter, Men's Wearhouse has seen one downward estimate revision versus no revision in the opposite direction, dragging the consensus estimate down to 84 cents a share from $1.09 over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 11.9% 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 Retail – Apparel Stores industry, you may instead consider Citi Trends, Inc. (CTRN), which holds a Zacks Rank #1 (Strong Buy). Moreover, if you are interested in the Retail/Wholesaler sector, you may consider some better-ranked stocks including Burlington Stores, Inc. (BURL) and Jamba, Inc. (JMBA). Both these stocks hold a Zacks Rank #1 (Strong Buy) and may be better selections at this time.
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