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Here's How Investors Can Find Strong Transportation Stocks with the Zacks ESP Screener
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Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
The Zacks Earnings ESP, Explained
The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
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.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider JB Hunt?
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. JB Hunt (JBHT - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $2.54 a share, just 30 days from its upcoming earnings release on October 21, 2022.
JB Hunt's Earnings ESP sits at +4.39%, which, as explained above, is calculated by taking the percentage difference between the $2.54 Most Accurate Estimate and the Zacks Consensus Estimate of $2.43. JBHT is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
JBHT is just one of a large group of Transportation stocks with a positive ESP figure. United Airlines (UAL - Free Report) is another qualifying stock you may want to consider.
United Airlines is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on October 18, 2022. UAL's Most Accurate Estimate sits at $2.33 a share 27 days from its next earnings release.
The Zacks Consensus Estimate for United Airlines is $2.15, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +8.07%.
JBHT and UAL's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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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Here's How Investors Can Find Strong Transportation Stocks with the Zacks ESP Screener
Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
The Zacks Earnings ESP, Explained
The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
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.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider JB Hunt?
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. JB Hunt (JBHT - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $2.54 a share, just 30 days from its upcoming earnings release on October 21, 2022.
JB Hunt's Earnings ESP sits at +4.39%, which, as explained above, is calculated by taking the percentage difference between the $2.54 Most Accurate Estimate and the Zacks Consensus Estimate of $2.43. JBHT is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
JBHT is just one of a large group of Transportation stocks with a positive ESP figure. United Airlines (UAL - Free Report) is another qualifying stock you may want to consider.
United Airlines is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on October 18, 2022. UAL's Most Accurate Estimate sits at $2.33 a share 27 days from its next earnings release.
The Zacks Consensus Estimate for United Airlines is $2.15, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +8.07%.
JBHT and UAL's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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 >>