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Strength Seen in Landmark Infrastructure (LMRK): Can Its 7.4% Jump Turn into More Strength?

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Landmark Infrastructure Partners shares rallied 7.4% in the last trading session to close at $12.80. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 2.2% loss over the past four weeks.

This increased investor optimism can be attributed to the news of the acquisition of Landmark Dividend LLC (“LD”) by Digital Colony. Particularly, affiliates of Digital Colony have entered into a definitive agreement for the same, which is referred as the Sponsor Acquisition.

Notably, LD owns, among other things, 100% of the membership interests in the general partner of Landmark Infrastructure Partners LP and 13.2% of the common units denoting limited partner interests in LMRK.

Moreover, upon completion of the Sponsor Acquisition, Digital Colony plans to submit acquisition proposal for Landmark Infrastructure Partners LP. If such acquisition is carried out, then it would result in the payment of $13.00 per common unit in cash to LMRK’s unaffiliated unit holders. The transaction values LMRK at roughly $972 million.

Markedly, the Sponsor Acquisition is likely to conclude within several weeks, subject to customary closing norms. However, as LMRK rallied to end the last trading session at $12.80, a little lower than what Digital Colony has offered, there is just a marginal upside in the stock.

Price and Consensus

Price Consensus Chart for LMRK

This property owner and manager is expected to post quarterly earnings of $0.13 per share in its upcoming report, which represents a year-over-year change of +550%. Revenues are expected to be $17.54 million, up 26.7% 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 Landmark Infrastructure, the consensus EPS estimate for the quarter has been revised 8.7% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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