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March 27, 2014

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SunOpta Inc. (STKL - Free Report) just hit a fresh high moving above the psychologically-important $10 per share level for the first time. This mark is very close to the 52 week high for SunOpta which has added more than 10% in the last 12 weeks, suggesting that decent momentum is present in STKL.

But after this fresh 52 week high and the positive price momentum, investors have to be wondering if SunOpta can continue to push higher or if a pullback is overdue. One place to find the answer could be in the recent earnings estimate revision activity that is taking place in STKL.

Recent Estimates

Despite the move higher in sunOpta’s stock price, we have seen pretty negative earnings estimate revisions as of late, which means that analysts are becoming more bearish about STKL’s prospects. In fact, 4 estimates have gone lower in the past two months compared to no estimates moving higher, while the consensus estimate has moved in the wrong direction over the same time frame too.

We actually give STKL a Zacks Rank #4 (Sell) based on this information and think that the move higher for this company might be a bit overdone. So while trading has certainly been good lately, estimates suggest that this run could soon enter a consolidation period and that a pullback may be ahead for this ‘sell’ ranked stock in the near term.

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