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 Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS) , 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 ADMS.
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen three estimates moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from a loss of $3.52 a share a month ago to its current level of a loss of $3.90.
Also, for the current quarter, Adamas has seen three downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to a loss of $1.07 a share from 94 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 20.4% in the past month.
Adamas Pharmaceuticals, Inc. Price and Consensus
Adamas Pharmaceuticals, Inc. Price and Consensus | Adamas Pharmaceuticals, Inc. Quote
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 Medical sector, you may instead consider a better-ranked stock - Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) . The stock currently holds a Zacks Rank #1 (Strong Buy) and may be a better selection at this time. You can see the complete list of today’s Zacks #1 Rank stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Alexion Pharmaceuticals, Inc. (ALXN): Free Stock Analysis Report
Adamas Pharmaceuticals, Inc. (ADMS): Free Stock Analysis Report
Original post
Zacks Investment Research