Owens & Minor (OMI) shares ended the last trading session 7.6% higher at $16.48. 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 5.3% loss over the past four weeks.
The sharp upsurge in Owen & Minor's shares can be attributed to the company's agreement to acquire medical equipment firm Rotech Healthcare for $1.36 billion to expand its presence in home-based care. The acquisition is likely to give Owens & Minor access to Rotech's portfolio of home medical equipment, including those used for treatment of sleep apnea and diabetes. Owens & Minor expects to use a combination of cash and debt to fund the transaction.
This medical supply distributor is expected to post quarterly earnings of $0.31 per share in its upcoming report, which represents a year-over-year change of +72.2%. Revenues are expected to be $2.64 billion, up 3.2% 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 Owens & Minor, 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 OMI 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 >>>>
Owens & Minor belongs to the Zacks Medical - Products industry. Another stock from the same industry, Ayr Wellness Inc. (AYRWF), closed the last trading session 0.7% higher at $2.22. Over the past month, AYRWF has returned -0.8%.
For Ayr Wellness Inc.
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