Falcon Minerals (FLMN) up 6.8%: Is this a hint of more gains?

Falcon Minerals (FLMN) shares are up 6.8% in the last trading session to close at $5.02. The move was supported by solid volume, with far more shares changing hands than in a normal session. That compares to the stock’s 5.2% gain over the past four weeks.

The stock was primarily driven by increased optimism about the accelerated recovery in the energy sector following the massive improvement in oil prices. Falcon Minerals is well positioned to capitalize on the rapidly improving oil price with mineral, royalty and parent royalty interests in the prolific Eagle Ford shale deposit. The Company has a conservative balance sheet with low leverage exposure. As such, the company will rely on its balance sheet to weather the energy business uncertainty caused by the coronavirus pandemic.

This company is expected to report quarterly earnings of $0.08 per share in its upcoming report, a +700% year-over-year change. Revenue is expected to be $21.5 million, up 122.3% from the same quarter last year.

While earnings and sales growth expectations are important in assessing a stock’s potential strength, empirical research shows a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

For Falcon Minerals, the consensus EPS estimate for the quarter has been flat for the last 30 days. And a stock’s price typically doesn’t move any higher unless there’s a trend in earnings estimate revisions. So keep an eye on FLMN going forward to see if this latest jump can translate to more strength down the road.

The stock currently carries a Zacks Rank of 3 (Hold). You can see the full list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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