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CECO (CECE) Moves 9.4% Higher: Will This Strength Last?

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CECO Environmental shares soared 9.4% in the last trading session to close at $7.08. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 11.6% gain over the past four weeks.

The stock surged primarily on optimism surrounding strong demand for pollution abatement technologies and services across manufacturing plants. An increase in environmental management programs and rapid urbanization is also aiding the company.

This maker of air pollution controls and industrial ventilation systems is expected to post quarterly earnings of $0.11 per share in its upcoming report, which represents a year-over-year change of +22.2%. Revenues are expected to be $92.01 million, up 16.9% 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 CECO, 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 CECE 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 >>>>

CECO is a member of the Zacks Pollution Control industry. One other stock in the same industry, Donaldson (DCI - Free Report) , finished the last trading session 0.7% higher at $50.80. DCI has returned 7.3% over the past month.

For Donaldson, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.84. This represents a change of +27.3% from what the company reported a year ago. Donaldson currently has a Zacks Rank of #3 (Hold).


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