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Bull of the Day: Verso (VRS)


The Russell 2000 has taken a mighty tumble since breaking down through its 50-day moving average. The volatility has taken many small caps off down from their highs. As I’m sifting through the wreckage, I’m looking for stocks with solid earnings and great future prospects which are oversold. An easy way to do is to look for Zacks Rank #1 (Strong Buy) stocks. These stocks have had recent earnings estimate revisions to the upside, confirming the bullishness of analysts.

Today’s Bull of the Day is Zacks Rank #1 (Strong Buy) Verso Corp (VRS). Verso Corporation produces and sells coated papers in North America. It operates through two segments, Paper and Pulp. The company offers coated freesheet and coated groundwood, specialty, inkjet and digital, supercalendered, and uncoated freesheet papers; and northern bleached hardwood Kraft pulp to manufacture printing, writing, and specialty paper grades, as well as to manufacture tissue products. Its paper products are used primarily in media and marketing applications, including catalogs, magazines, and commercial printing applications, such as high-end advertising brochures, annual reports, and direct-mail advertising; and specialty applications comprising flexible packaging, and label and converting.

A quick glance at the Detailed Estimates tab on Zacks reveals why the stock carries the bullish Zacks Rank. Over the last ninety days, two analysts have increased their earnings estimates for the current quarter and current year. The bullish revisions have pushed our Zacks Consensus Estimate from 90 cents to $1.73 for the current quarter while the current year number has more than tripled, from 98 cents all the way up to $3.09.

That big jump in consensus has helped the stock go on an absolute tear over the last quarter. The stock was trading down in the low $20s before the revisions hit the wire, surging over $34 at the start of this month. Over the last week, with the small caps coming under pressure and the broad market looking for direction, the stock has been consolidating in the $32s. A positively-sloped 50-day moving average is helping to confirm the bullish trend over the intermediate term.

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