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Should You Get Rid of Stein Mart (SMRT) Now?

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 Stein Mart, Inc. SMRT, 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 MG.

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 earnings of 12 cents a share a month ago to its current level of 5 cents per share.

Also, for the current quarter, Stein Mart has seen 1 downward estimate revision versus no revisions in the opposite direction, dragging the consensus estimate down to earnings of a loss of 6 cents a share from earnings of 1 cents over the past 30 days.  

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Stein Mart Inc. Price and Consensus

 

Stein Mart Inc. Price and Consensus | Stein Mart Inc. Quote

The stock also has seen some pretty dismal trading lately, as the share price has dropped 58.3% 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 Retail - Apparel and Shoes industry, you may instead consider a better-ranked stock Tilly's, Inc. TLYS. 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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Stein Mart Inc. (SMRT): Free Stock Analysis Report
 
Tilly's Inc. (TLYS): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research