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 Basic Energy Services, Inc. (BAS), 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 BAS.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 11 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 a loss of $1.06 a share a month ago to its current level of a loss of $2.66 per share.
Also, for the current quarter, Basic Energy Services has seen 10 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to a loss of 45 cents a share from a loss of 10 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 11.3% 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 broader Oil-Energy sector, you may instead a better-ranked stock EQT Midstream Partners, LP (EQM) with a Zacks Rank #1 (Strong Buy).
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BASIC EGY SVCS (BAS): Free Stock Analysis Report
EQT MIDSTRM PTR (EQM): Free Stock Analysis Report
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