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Ramaco Resources (METC) Surges 14.2%: Is This an Indication of Further Gains?

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Ramaco Resources (METC - Free Report) shares soared 14.2% in the last trading session to close at $17.50. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 5.6% loss over the past four weeks.

Ramco Resources is poised to gain from improving metallurgical coal demand due to the ongoing  recovery in the global steel industry.  The company continues to enjoy the benefit of its strong infrastructure, improving met coal prices and stable demand from diversified existing customer base.

The company is an advantageous position due to its reserve geology, which results in low production cash costs per ton. It has high quality metallurgical coal production assets and is well-positioned to transact into both domestic and export markets. The company also has a long history of acquiring, developing, financing, building, and operating coal assets, which continues to boost its operations.

This company is expected to post quarterly earnings of $1.41 per share in its upcoming report, which represents a year-over-year change of +1310%. Revenues are expected to be $172.8 million, up 297.6% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Ramaco Resources, 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 METC 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 >>>>

Ramaco Resources is part of the Zacks Coal industry. Peabody Energy (BTU - Free Report) , another stock in the same industry, closed the last trading session 13.4% higher at $29.15. BTU has returned 29.5% in the past month.

For Peabody Energy, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.16. This represents a change of +363.4% from what the company reported a year ago. Peabody Energy currently has a Zacks Rank of #1 (Strong Buy).


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