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Why Investors Need to Take Advantage of These 2 Consumer Staples Stocks Now
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Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
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.
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.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.
Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, 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 e.l.f. Beauty?
The final step today is to look at a stock that meets our ESP qualifications. e.l.f. Beauty (ELF - Free Report) earns a #1 (Strong Buy) 30 days from its next quarterly earnings release on February 1, 2023, and its Most Accurate Estimate comes in at $0.30 a share.
e.l.f. Beauty's Earnings ESP sits at +31.48%, which, as explained above, is calculated by taking the percentage difference between the $0.30 Most Accurate Estimate and the Zacks Consensus Estimate of $0.23. ELF 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.
ELF is part of a big group of Consumer Staples stocks that boast a positive ESP, and investors may want to take a look at Archer Daniels Midland (ADM - Free Report) as well.
Slated to report earnings on January 24, 2023, Archer Daniels Midland holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.59 a share 22 days from its next quarterly update.
For Archer Daniels Midland, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.57 is +1.17%.
ELF and ADM's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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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Why Investors Need to Take Advantage of These 2 Consumer Staples Stocks Now
Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
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.
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.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.
Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, 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 e.l.f. Beauty?
The final step today is to look at a stock that meets our ESP qualifications. e.l.f. Beauty (ELF - Free Report) earns a #1 (Strong Buy) 30 days from its next quarterly earnings release on February 1, 2023, and its Most Accurate Estimate comes in at $0.30 a share.
e.l.f. Beauty's Earnings ESP sits at +31.48%, which, as explained above, is calculated by taking the percentage difference between the $0.30 Most Accurate Estimate and the Zacks Consensus Estimate of $0.23. ELF 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.
ELF is part of a big group of Consumer Staples stocks that boast a positive ESP, and investors may want to take a look at Archer Daniels Midland (ADM - Free Report) as well.
Slated to report earnings on January 24, 2023, Archer Daniels Midland holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.59 a share 22 days from its next quarterly update.
For Archer Daniels Midland, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.57 is +1.17%.
ELF and ADM's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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 >>