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Why Grupo Aval Acciones y Valores S.A. (AVAL) Might be Well Poised for a Surge

Grupo Aval Acciones y Valores S.A. (AVAL) shares have started gaining and might continue moving higher in the near term, as indicated by solid earning...

This story originally appeared on Zacks

Grupo Aval Acciones y Valores S.A. (AVAL) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.

- Zacks

Analysts' growing optimism on the earnings prospects of this company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for Grupo Aval Acciones y Valores S.A. As there has been strong agreement among the covering analysts in raising estimates.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The company is expected to earn $0.16 per share for the current quarter, which represents a year-over-year change of -15.79%.

Over the last 30 days, one estimate has moved higher for Grupo Aval Acciones y Valores S.A. compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 14.29%.

Current-Year Estimate Revisions

For the full year, the earnings estimate of $0.73 per share represents a change of +23.73% from the year-ago number.

The revisions trend for the current year also appears quite promising for Grupo Aval Acciones y Valores S.A. with one estimate moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 11.45%.

Favorable Zacks Rank

The promising estimate revisions have helped Grupo Aval Acciones y Valores S.A. earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Investors have been betting on Grupo Aval Acciones y Valores S.A. because of its solid estimate revisions, as evident from the stock's 14.5% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.

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