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What Falling Estimates & Price Mean for Ocwen Financial (OCN) - Tale of the Tape

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 Ocwen Financial Corp. (NYSE: OCN), 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 OCN.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 4 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 $4.73 a share a month ago to its current level of $3.36.

Also, for the current quarter, Ocwen Financial has seen 3 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate to 90 cents a share from $1.08 over the past 30
days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 17.19% 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 sector, you may instead consider some better-ranked stocks including Atlas Financial Holdings, Inc. (NASDAQ: AFH), Anworth Mortgage Asset Corporation (NYSE: ANH) and Aspen Insurance Holding Limited (NYSE: AHL). Among these stocks, Atlas and Aspen hold a Zacks Rank #1 (Strong Buy) and Anworth holds a Zacks Rank #2 (Buy). With favorable Zacks Rank, these stocks may be better selections at this time.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
ATLAS FINL HLDG (NASDAQ: AFH): Free Stock Analysis Report
 
ASPEN INS HLDGS (NYSE: AHL): Free Stock Analysis Report
 
ANWORTH MTGE (NYSE: ANH): Free Stock Analysis Report
 
OCWEN FINL CORP (NYSE: OCN): Free Stock Analysis Report
 
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Zacks Investment Research

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

 

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