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Strength Seen in First United (FUNC): Can Its 6.1% Jump Turn into More Strength?

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First United Corporation (FUNC - Free Report) shares ended the last trading session 6.1% higher at $31.01. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 2.8% loss over the past four weeks.

First United became a part of the Russell 2500 Index, a mid-cap benchmark, effective yesterday. The bank’s inclusion signals its market cap growth and compliance with index criteria. This move boosted short-term liquidity and trading volume as passive funds tracking the index rebalanced to include FUNC shares. This led the stock higher.

This company is expected to post quarterly earnings of $0.84 per share in its upcoming report, which represents a year-over-year change of +12%. Revenues are expected to be $21.26 million, up 5.9% 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 First United, 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 FUNC 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 >>>>

First United belongs to the Zacks Banks - Northeast industry. Another stock from the same industry, Flagstar Financial (FLG - Free Report) , closed the last trading session 1.9% lower at $10.6. Over the past month, FLG has returned -6.2%.

For Flagstar Financial, the consensus EPS estimate for the upcoming report has changed -0.9% over the past month to -$0.12. This represents a change of +88.6% from what the company reported a year ago. Flagstar Financial currently has a Zacks Rank of #3 (Hold).


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