Back to top

Image: Bigstock

Strength Seen in RBC Bearings (ROLL): Can Its 5.4% Jump Turn into More Strength?

Read MoreHide Full Article

RBC Bearings Incorporated (ROLL - Free Report) shares soared 5.4% in the last trading session to close at $199.57. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 16.7% loss over the past four weeks.

RBC Bearings’ offerings of common and preferred stocks, and senior notes to raise funds for financing the acquisition of Asea Brown Boveri Ltd’s DODGE mechanical power transmission division seem to have sparked sentiments for the stock. The buyout is anticipated to boost RBC Bearings’ market exposure, product offerings and customer base. Accretion in earnings of 40-60% is also expected in the initial full year of the completion of the transaction.

This maker of bearings and components is expected to post quarterly earnings of $1.05 per share in its upcoming report, which represents a year-over-year change of +12.9%. Revenues are expected to be $160.79 million, up 9.9% 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 RBC Bearings, 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 ROLL going forward to see if this recent jump can turn into more strength down the road.

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 >>>>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

RBC Bearings Incorporated (ROLL) - free report >>

Published in