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Falling Earnings Estimates Signal Weakness Ahead for Teekay Tankers (TNK)

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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 Teekay Tankers Ltd. (TNK - Free Report) , 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 TNK.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen five estimates moving down in the past 60 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from 18 cents a share a month ago to its current level of 13 cents.

Also, for the current quarter, Teekay Tankers has seen three downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to nine cents a share from 16 cents over the past 60 days.  

The stock also has seen some pretty dismal trading lately, as the share price has dropped 10.5% 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 Transportation - Shipping industry, you may instead consider a better-ranked stock – StealthGas, Inc. (GASS). 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.

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