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Why Brookdale Senior Living (BKD) Could Be Positioned for a Slump

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 Brookdale Senior Living Inc. BKD, 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 BKD.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen three 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 a loss of 85 cents a share a month ago to its current level of a loss of 98 cents.

Also, for the current quarter, Brookdale Senior Living has seen two downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to a loss of 23 cents a share from a loss of 21 cents over the past 30 days.  

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The stock also has seen some pretty dismal trading lately, as the share price has dropped 21.9% in the past month.

Brookdale Senior Living Inc. Price and Consensus

Brookdale Senior Living Inc. Price and Consensus | Brookdale Senior Living Inc. Quote

 

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 Medical - Nursing Homes industry, you may instead consider a better-ranked stock - The Ensign Group, Inc. ENSG. 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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Brookdale Senior Living Inc. (BKD) : Free Stock Analysis Report
 
The Ensign Group, Inc. (ENSG) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.