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Strength Seen in Olympic Steel (ZEUS): Can Its 5.4% Jump Turn into More Strength?

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Olympic Steel (ZEUS - Free Report) shares soared 5.4% in the last trading session to close at $49.29. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 19.2% gain over the past four weeks.

Olympic Steel’s rally appears to be driven by the company’s announcement of a roughly 38.9% hike in quarterly dividend. The company raised its quarterly cash dividend to 12.5 cents per share from the prior dividend of 9 cents a share.

This steel maker is expected to post quarterly earnings of $0.21 per share in its upcoming report, which represents a year-over-year change of -92.5%. Revenues are expected to be $578.9 million, down 7.3% 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 Olympic Steel, 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 ZEUS going forward to see if this recent jump can turn into more strength down the road.

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

Olympic Steel is a member of the Zacks Steel - Producers industry. One other stock in the same industry, TimkenSteel , finished the last trading session 1.1% higher at $19.65. TMST has returned 3.1% over the past month.

TimkenSteel's consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.26. Compared to the company's year-ago EPS, this represents a change of -132.5%. TimkenSteel currently boasts a Zacks Rank of #5 (Strong Sell).


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