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 Noble Energy, Inc. (NBL), 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 NBL.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 14 estimates moving down in the past 30 days, compared with no upward revision. This trend has caused the consensus estimate to trend lower, going from $2.94 a share a month ago to its current level of $2.54.
Also, for the current quarter, Noble Energy has seen 13 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to 58 cents a share from 81 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 13% 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 Oil-US Exploration and Production industry, you may instead consider some better-ranked stocks including Cobalt International Energy, Inc. (CIE), Midstates Petroleum Company, Inc. (MPO) and Torchlight Energy Resources, Inc. (TRCH). While Cobalt International holds a Zacks Rank #1 (Strong Buy), Midstates Petroleum and Torchlight Energy hold a Zacks Rank #2 (Buy). With favorable Zacks Rank, these stocks may be better selections at this time.
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