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Falling Earnings Estimates Signal Weakness Ahead for Rubicon Technology (RBCN)

Zacks Equity Research

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 Rubicon Technology, Inc. (RBCN), 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 RBCN.

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 loss estimate to widen, going from a loss of $1.33 a share a month ago to its current level of loss of $1.52.

Also, for the current quarter, Rubicon Technology has seen 4 downward estimate revisions versus no revision in the opposite direction, widening the consensus loss estimate to a loss of 41 cents a share from a loss of 31 cents over the past 30 days.

The stock also has seen some pretty dismal trading lately, as the share price has dropped 14.1% 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 Semiconductor sector, you may instead consider some better-ranked stocks including NVE Corp. (NVEC), Silicon Motion Technology Corp. (SIMO) and Advanced Semiconductor Engineering Inc. (ASX). While NVE Corp. and Silicon Motion Technology carry Zacks Rank #1 (Strong Buy), Advanced Semiconductor Engineering carries Zacks Rank #2 (Buy) and may be better selections at this time.

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RUBICON TECH INC (RBCN): Free Stock Analysis Report

NVE CP (NVEC): Free Stock Analysis Report

SILICON MOTION TECHNOLOGY CORP (SIMO): Free Stock Analysis Report

ADVANCED SEMICONDUCTOR ENGR (ASX): Free Stock Analysis Report


Zacks Investment Research