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Bear of the Day: Armstrong Flooring (AFI)

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It looked like curtains for the market early on Monday as traders came in to sell the market following President Trump’s tweet about the China trade deal. Luckily, the market recovered of the lows, with the small caps of the Russell managing to breakeven. You may think that because of that you can just jump in and buy any stock you see. To the contrary, many risks still loom in the market. By avoiding stocks with negative earnings estimate revisions, you can avoid potential pitfalls that lie ahead. One way of finding these stocks is by leaning on the power of the Zacks Rank. Today’s Bear of the Day is one of those stocks that may carry more risk than you’d expect.

Today’s Bear of the4 Day is Zacks Rank #5 (Strong Sell) Anderson Flooring . Armstrong Flooring, Inc., together with its subsidiaries, designs, manufactures, sources, and sells resilient flooring products for use primarily in the construction and renovation of commercial, residential, and institutional buildings in North America and the Pacific Rim. The company sells its products to independent wholesale flooring distributors, retailers, builders, contractors, installers, property management firms, homeowners, and others. 

The reason for the unfavorable Zacks Rank lies in the series of recent earnings estimate revisions to the downside. Over the last sixty days, our current year Zacks Consensus Estimate has come down from 53 cents to 26 cents. Next year’s number has dropped from 70 cents to 55 cents. With estimates moving in the wrong direction, investors should make sure they understand the long-term goals of the company.

The Building Products – Wood Industry ranks in the Bottom 16% of our Zacks Industry Rank. Investors looking for other stocks within the same industry should do further research on a couple of Zacks Rank #2 (Buy) stocks. Two of these stocks include Floor & Décor Holdings (FND - Free Report) and Rayonier (RYN - Free Report) .

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