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II-VI (IIVI) Surges 5.6%: Is This an Indication of Further Gains?

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II-VI (IIVI) shares ended the last trading session 5.6% higher at $55.72. 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 9.4% loss over the past four weeks.

II-VI Incorporated’s rally is primarily driven by bullishness surrounding the company’s progress in its datacom networking business unit. An uptrend in the semiconductor capital equipment, communications and industrial end markets coupled with a solid backlog level, augurs well for the company.

This Laser and optics manufacturer is expected to post quarterly earnings of $0.95 per share in its upcoming report, which represents a year-over-year change of +8%. Revenues are expected to be $861.6 million, up 6.6% 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 II-VI, the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on IIVI 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 >>>>

II-VI belongs to the Zacks Manufacturing - Electronics industry. Another stock from the same industry, Franklin Electric (FELE), closed the last trading session 3.7% higher at $72.50. Over the past month, FELE has returned -3.8%.

Franklin Electric's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.03. Compared to the company's year-ago EPS, this represents a change of +24.1%. Franklin Electric currently boasts a Zacks Rank of #4 (Sell).


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