Virtus (VRTS) Surges 6.4%: Is This an Indication of Further Gains?

Virtus Investment Partners VRTS shares rallied 6.3% in the last trading session to close at $200.71. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 10.5% gain over the past four weeks.

Virtus Investment stock increased in price for the second consecutive trading session. The broader market optimism surrounding potential trade agreements and increased expectations of earlier-than-anticipated interest rate cuts by the Federal Reserve has boosted investor sentiment toward finance stocks. Moreover, as investors are constantly looking for better investment options in order to get higher yields, asset managers are expected to witness inflows, which will likely positively impact their top lines. These factors probably drove the VRTS stock higher.

This asset management company is expected to post quarterly earnings of $6.17 per share in its upcoming report, which represents a year-over-year change of -5.5%. Revenues are expected to be $188.7 million, down 7.1% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Virtus, 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 VRTS going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Virtus belongs to the Zacks Financial - Investment Management industry. Another stock from the same industry, SEI Investments SEIC, closed the last trading session 0.5% higher at $91.96. Over the past month, SEIC has returned 7.7%.

SEI's consensus EPS estimate for the upcoming report has changed +2.9% over the past month to $1.15. Compared to the company's year-ago EPS, this represents a change of +9.5%. SEI currently boasts a Zacks Rank of #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research