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.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 8 estimates moving down in the past 30 days, compared to no upward revision. This trend has caused the consensus estimate to trend lower, going from $4.11 a share a month ago to its current level of $3.69 per share.
Also, for the current quarter, Keurig Green Mountain has seen 6 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to 79 cents a share from $1.10 over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 21.4% 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 Staples sector, you may instead consider a better-ranked stock – The WhiteWave Foods Company (WWAV). The stock currently holds a Zacks Rank #2 (Buy) and may be better selection at this time.
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