What Makes Regional Management (RM) a Strong Sell? - Tale of the Tape
May 09 2014 - 9:00AM
Zacks
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
Regional Management Corp. (RM), 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 RM.
A key reason for this move has been the negative trend in earnings
estimate revisions. For the full year, we have seen 1 estimate
moving down in the past 30 days, compared with no upward revision.
This trend has caused the consensus estimate to trend lower, going
from $2.85 a share a month ago to its current level of $2.10.
Also, for the current quarter, Regional Management has seen 3
downward estimate revisions versus no revision in the opposite
direction, dragging the consensus estimate down to 37 cents a share
from 60 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the
share price has dropped 36.0% 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 Financial Construction Loans
Services industry, you may instead consider some better-ranked
stocks including Cash America International, Inc.
(CSH), Santander Consumer USA Holdings Inc. (SC)
and The First Marblehead Corporation (FMD). All
these stocks hold a Zacks Rank #2 (Buy) and may be better
selections at this time.
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Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days. Click
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CASH AM INTL (CSH): Free Stock Analysis Report
FIRST MARBLEHD (FMD): Get Free Report
REGIONAL MANAGE (RM): Free Stock Analysis Report
SANTANDER CNSMR (SC): Free Stock Analysis Report
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