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 Bitauto Holdings Limited (BITA), 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 BITA.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, although we have not seen any estimates moving down in the past 30 days, the consensus estimate has trended lower, going from a loss of $1.14 a share a month ago to its current level of a loss of $1.36.
Also, for the current quarter, Bitauto Holdings has not seen any downward estimate revisions, but the consensus estimate has moved down to a loss of 51 cents a share from a loss of 44 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 13.9% 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 Internet Services — Delivery sector, you may instead consider a better-ranked stock — Vipshop Holdings Limited ( VIPS). The stock currently holds a Zacks Rank #2 (Buy) and may be better selection at this time.
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