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City Office REIT (CIO) Surges 24.1%: Is This an Indication of Further Gains?

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City Office REIT (CIO - Free Report) shares soared 24.1% in the last trading session to close at $6.9. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.5% gain over the past four weeks.

The increased investor optimism in the stock can be attributed to the recent announcement from City Office of entering into a definitive merger agreement with MCME Carell Holdings, LP and MCME Carell Holdings, LLC, under which MCME Carell will acquire all of the issued and outstanding shares of City Office for $7 per share of common stock.

This real estate investment trust is expected to post quarterly funds from operations (FFO) of $0.28 per share in its upcoming report, which represents no change from the year-ago quarter. Revenues are expected to be $42.8 million, up 1.1% from the year-ago quarter.

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

For City Office REIT, the consensus FFO per share 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 FFO estimate revisions. So, make sure to keep an eye on CIO 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 >>>>

City Office REIT belongs to the Zacks REIT and Equity Trust - Other industry. Another stock from the same industry, Gladstone Land (LAND - Free Report) , closed the last trading session 0.3% lower at $10.77. Over the past month, LAND has returned 6.6%.

Gladstone's consensus FFO per share estimate for the upcoming report has remained unchanged over the past month at $0.03. Compared to the company's year-ago FFO per share, this represents a change of -70%. Gladstone currently boasts a Zacks Rank of #3 (Hold).


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