Should You Get Rid of Education Management Corporation (EDMC) Now? - Tale of the Tape
03 Mars 2014 - 2:56PM
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
Education Management Corporation (EDMC), 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 EDMC.
A key reason for this move has been the negative trend in earnings
estimate revisions. For the full year, we have seen 7 estimates
moving down in the past 30 days, compared with no upward revision.
This trend has caused the consensus estimate to trend lower, going
from 25 cents a share a month ago to its current level of 19
cents.
Also, for the current quarter, Education Management has seen 5
downward estimate revisions versus no revision in the opposite
direction, dragging the consensus estimate down to 14 cents a share
from 21 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the
share price has dropped 23.26% 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 Consumer Discretionary sector,
you may instead consider some better-ranked stocks including
Strayer Education Inc. (STRA), Career
Education Corp. (CECO) and New
Oriental Education & Technology Group Inc. (EDU) Among
these stocks Strayer Education holds a Zacks Rank #1 (Strong Buy)
and Career Education and New Oriental hold a Zacks Rank #2 (Buy).
With favorable Zacks Ranks, these stocks may be better selections
at this time.
Want the latest recommendations from Zacks Investment Research?
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CAREER EDU CORP (CECO): Free Stock Analysis Report
EDUCATION MANAG (EDMC): Free Stock Analysis Report
NEW ORIENTAL ED (EDU): Free Stock Analysis Report
STRAYER EDUC (STRA): Free Stock Analysis Report
To read this article on Zacks.com click here.
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