What Makes Covenant Transportation (CVTI) a Strong Sell?
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 Covenant Transportation Group, Inc. CVTI, 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 CVTI.
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 96 cents a share a month ago to its current level of 92 cents.
Also, for the current quarter, Covenant has seen 1 downward estimate revision versus no revisions in the opposite direction, dragging the consensus estimate down to 34 cents a share from 38 cents over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the share price has dropped 13.7% in the past month.
Covenant Transportation Group, Inc. Price and Consensus
Covenant Transportation Group, Inc. Price and Consensus | Covenant Transportation Group, 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 Transportation - Truck industry, you may instead consider a better-ranked stock - Old Dominion Freight Line, Inc. ODFL. 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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Old Dominion Freight Line, Inc. (ODFL): Free Stock Analysis Report
Covenant Transportation Group, Inc. (CVTI): Free Stock Analysis Report
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