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How to Boost Your Portfolio with Top Industrial Products Stocks Set to Beat Earnings
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Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
The Zacks Earnings ESP, Explained
The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.
Should You Consider Eaton?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Eaton (ETN - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $2.32 a share, just four days from its upcoming earnings release on April 30, 2024.
By taking the percentage difference between the $2.32 Most Accurate Estimate and the $2.28 Zacks Consensus Estimate, Eaton has an Earnings ESP of +1.95%. Investors should also know that ETN is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
ETN is one of just a large database of Industrial Products stocks with positive ESPs. Another solid-looking stock is Packaging Corp. (PKG - Free Report) .
Slated to report earnings on July 22, 2024, Packaging Corp. holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $2.11 a share 87 days from its next quarterly update.
Packaging Corp.'s Earnings ESP figure currently stands at +2.07% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.06.
Because both stocks hold a positive Earnings ESP, ETN and PKG could potentially post earnings beats in their next reports.
Find Stocks to Buy or Sell Before They're Reported
Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>
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How to Boost Your Portfolio with Top Industrial Products Stocks Set to Beat Earnings
Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
The Zacks Earnings ESP, Explained
The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.
Should You Consider Eaton?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Eaton (ETN - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $2.32 a share, just four days from its upcoming earnings release on April 30, 2024.
By taking the percentage difference between the $2.32 Most Accurate Estimate and the $2.28 Zacks Consensus Estimate, Eaton has an Earnings ESP of +1.95%. Investors should also know that ETN is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
ETN is one of just a large database of Industrial Products stocks with positive ESPs. Another solid-looking stock is Packaging Corp. (PKG - Free Report) .
Slated to report earnings on July 22, 2024, Packaging Corp. holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $2.11 a share 87 days from its next quarterly update.
Packaging Corp.'s Earnings ESP figure currently stands at +2.07% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.06.
Because both stocks hold a positive Earnings ESP, ETN and PKG could potentially post earnings beats in their next reports.
Find Stocks to Buy or Sell Before They're Reported
Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>