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Great Ajax (AJX) Surges 5.3%: Is This an Indication of Further Gains?

Zacks Equity Research
·2 min read

Great Ajax (AJX) shares ended the last trading session 5.3% higher at $10.13. 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 8.1% loss over the past four weeks.

Great Ajax’s performance in the near term is likely to improve on the back of a favorable economic environment, a decent mortgage pipeline and a dip in funding costs. Economic improvement will enhance the debt servicing ability of the struggling borrowers. The tailwinds likely led to the optimistic stance of the investors, which drove AJX’s stock.

This real estate investment trust is expected to post quarterly earnings of $0.29 per share in its upcoming report, which represents a year-over-year change of -31%. Revenues are expected to be $15.46 million, up 8.7% 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.

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For Great Ajax, 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 AJX 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 >>>>

Great Ajax is part of the Zacks REIT and Equity Trust industry. NexPoint (NREF), another stock in the same industry, closed the last trading session 3.2% lower at $20.26. NREF has returned -13.9% in the past month.

NexPoint's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.54. Compared to the company's year-ago EPS, this represents a change of -8.5%. NexPoint currently boasts a Zacks Rank of #3 (Hold).


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Zacks Investment Research