Strength Seen in Atlas (ATCO): Can Its 5.9% Jump Turn into More Strength?
Atlas (ATCO) shares ended the last trading session 5.9% higher at $14.39. 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 0.3% loss over the past four weeks.
Impressive price performance for Atlas seems to be driven by some favorable development at its a wholly owned subsidiary – Seaspan Corporation. The firm announced that it has forward fixed contracts and thereby, extended the current lease terms for 17 containerships with COSCO SHIPPING Lines.
Earlier, the vessels were scheduled to close current charters with COSCO for two vessels in 2021, 13 vessels in 2022 and two vessels in 2023. Now, this has been extended for a three-year term, which will become effective at the end of their current charter period. Seaspan expects these contracts to generate nearly $0.7 billion of gross contracted cash flow over the course of the charter terms between 2023 and 2027.
This shipping company is expected to post quarterly earnings of $0.31 per share in its upcoming report, which represents a year-over-year change of +3.3%. Revenues are expected to be $385.37 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 Atlas, 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 ATCO 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 >>>>
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