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MFA Financial (MFA) Moves 6.2% Higher: Will This Strength Last?

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MFA Financial MFA shares ended the last trading session 6.2% higher at $10.53. 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 25% loss over the past four weeks.

MFA Financial continues to take advantage of the strong housing market and liquidate Real Estate Owned properties. Moreover, the outlook for mortgage credit is decent. The company’s acquisition of Lima One has driven higher origination, and servicing and other fee income. This, along with new investments, decent credit performance and continued portfolio growth, has likely spiked investors’ interest in the stock.

This real estate investment trust is expected to post quarterly earnings of $0.45 per share in its upcoming report, which represents a year-over-year change of -13.5%. Revenues are expected to be $54.3 million, down 7.9% 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 MFA Financial, the consensus EPS estimate for the quarter has been revised 6.3% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on MFA 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 >>>>

MFA Financial belongs to the Zacks REIT and Equity Trust industry. Another stock from the same industry, Annaly Capital Management (NLY), closed the last trading session 4.2% higher at $5.71. Over the past month, NLY has returned -12.6%.

For Annaly , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.25. This represents a change of -16.7% from what the company reported a year ago. Annaly currently has a Zacks Rank of #3 (Hold).


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