CAI International shares ended the last trading session 46.9% higher at $56.05. 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 7.8% loss over the past four weeks.

The share price surge on Jun 18 followed the definitive deal inked by CAI International with Mitsubishi HC Capital. Under the merger agreement, CAI International has agreed to be acquired by the Japanese leasing company.

Per the deal, Mitsubishi HC Capital will acquire all of CAI’s outstanding common stock in an all-cash transaction for $56 per share (equity value of roughly $1.1 billion). The transaction, which has been approved by CAI’s board of directors, is expected to close in the late third quarter or early fourth-quarter 2021.

 

This transportation finance and logistics company is expected to post quarterly earnings of $1.74 per share in its upcoming report, which represents a year-over-year change of +123.1%. Revenues are expected to be $82.93 million, up 9.5% 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 CAI International, the consensus EPS estimate for the quarter has been revised 8% 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 CAI 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 >>>>