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 Intrepid Potash, Inc. IPI, 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 IPI.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 4 estimates moving down in the past 30 days, compared to no upward revision, with estimates widening from a loss of 1 cent per share a month ago to its current level of a loss of 12 cents per share.
Also, for the current quarter, Intrepid Potash has seen 2 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to a loss of 6 cents a share from a loss of 1 cent per share over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 38.7% 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 Basic Materials sector, you may instead consider a better-ranked stock – American Vanguard Corp. AVD. The stock currently holds a Zacks Rank #2 (Buy) and may be better selection at this time.
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