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Strength Seen in Cavco (CVCO): Can Its 6.3% Jump Turn into More Strength?

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Cavco Industries, Inc. (CVCO - Free Report) shares ended the last trading session 6.3% higher at $230.62. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 1.2% gain over the past four weeks.

Shares of the company jumped surrounding the optimism of an accelerated recovery of the sector. The bullish sentiments can be attributable to Fed’s bullish view, extensive vaccination drive, additional government spending and favorable economic data.

Price and Consensus

Price Consensus Chart for CVCO

This homebuilder is expected to post quarterly earnings of $2.18 per share in its upcoming report, which represents a year-over-year change of +69%. Revenues are expected to be $306.6 million, up 20.1% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Cavco, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on CVCO going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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