Why HD Supply Holdings (HDS) Could Be Positioned for a Slump

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 HD Supply Holdings, Inc. HDS, 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 HDS.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen seven 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 $3.32 a share a month ago to its current level of $2.23.

Also, for the current quarter, HD Supply Holdings has seen five downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to 64 cents cents a share from $1.05 over the past 30 days.  

The stock also has seen some pretty dismal trading lately, as the share price has dropped 22.7% in the past month.

HD Supply Holdings, Inc. Price and Consensus

HD Supply Holdings, Inc. Price and Consensus | HD Supply Holdings, 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 Industrial Services industry, you may instead consider a better-ranked stock - Horiba Ltd. HRIBF. 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.

Zacks' 2017 IPO Watch List

Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.

One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>