What Falling Estimates & Price Mean for Discovery Laboratories (DSCO)
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 Discovery Laboratories Inc. (DSCO), 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 DSCO.
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 revisions. This trend has caused the consensus estimate to trend lower, going from a loss of 45 cents a share a month ago to its current level of a loss of 51 cents.
Also, for the current quarter, the consensus estimate widened from a loss of 9 cents a share a month ago to its current level of a loss of 12 cents.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 17.6% 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 healthcare sector, you may instead consider some better-ranked stocks including Dynavax Technologies Corp. (DVAX), Alexion Pharmaceuticals, Inc. (ALXN) and Actelion Ltd. (ALIOF). All these stocks hold a Zacks Rank #2 (Buy) and may be better selections at this time.
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DISCOVERY LABORATORIES NEW (DSCO): Free Stock Analysis Report
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