Strength Seen in WhiteHorse (WHF): Can Its 5.5% Jump Turn into More Strength?

WhiteHorse Finance (WHF) shares soared 5.5% in the last trading session to close at $7.33. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 1.8% loss over the past four weeks.

WhiteHorse shares rallied during the last trading session after the company announced the formation of a special committee to explore strategic alternatives, including a potential sale. The move fueled hopes that a transaction could help unlock value, given the stock’s significant discount to net asset value.

This lender to small companies is expected to post quarterly earnings of $0.25 per share in its upcoming report, which represents a year-over-year change of -3.9%. Revenues are expected to be $15.16 million, down 14.3% 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 WhiteHorse, the consensus EPS estimate for the quarter has been revised 1% 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 WHF 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 >>>>

WhiteHorse belongs to the Zacks Financial - SBIC & Commercial Industry industry. Another stock from the same industry, Blackstone Secured Lending Fund (BXSL), closed the last trading session 0.6% higher at $24.79. Over the past month, BXSL has returned 1.8%.

Blackstone Secured Lending Fund's consensus EPS estimate for the upcoming report has changed -1.8% over the past month to $0.67. Compared to the company's year-ago EPS, this represents a change of -18.3%. Blackstone Secured Lending Fund currently boasts a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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