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What Makes Cooper Tire & Rubber Company (CTB) a Strong Sell?

Zacks Equity Research
Updated

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 Cooper Tire & Rubber Company CTB, 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 CTB.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen four estimates moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from $3.12 a share a month ago to its current level of $2.19.

Also, for the current quarter, Cooper Tire & Rubber Company has seen three downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to 45 cents a share from 83 cents over the past 30 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 20.1% in the past month.

Cooper Tire & Rubber Company Price and Consensus

Cooper Tire & Rubber Company Price and Consensus | Cooper Tire & Rubber Company Quote

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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 Rubber - Tires industry, you may instead consider a better-ranked stock - Bridgestone Corp. BRDCY. The stock currently holds a Zacks Rank #2 (Buy) and may be a better selection at this time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Cooper Tire & Rubber Company (CTB) : Free Stock Analysis Report
 
Bridgestone Corp. (BRDCY) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research