Fails if: Any downward revision is observed this past week.

Many investors, especially institutional investors, pay close attention to estimate trends. It is likely that downward revisions will inhibit future share price performance immediately after the newsbreaks, and for succeeding weeks or months. These revisions often translate into sell offs.

But such an effect is not inevitable. Many investors do not invest based on the short-term earnings view. Some investors treat it as a contrary opportunity to buy shares at attractive prices after theyve dropped in response to estimate cuts.

If you are inclined to ignore or invest contrary to the estimate cuts always refresh your analysis to see if the recent estimate cut is symptomatic of a deeper problem - one that might dictate selling even under other investing styles. After all, on many occasions, the estimate cut will mean that at least one aspect of your original investment case will have deteriorated. So when you see this Risk Alert, take another look at the company and assess the likelihood that it will be able to get back on track within a time frame that fits your tolerance.

       Alerts:

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