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How to Boost Your Portfolio with Top Oils and Energy Stocks Set to Beat Earnings
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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.
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.
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.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
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 Magellan Midstream Partners?
The final step today is to look at a stock that meets our ESP qualifications. Magellan Midstream Partners earns a #2 (Buy) 14 days from its next quarterly earnings release on February 2, 2023, and its Most Accurate Estimate comes in at $1.33 a share.
MMP has an Earnings ESP figure of +1.62%, which, as explained above, is calculated by taking the percentage difference between the $1.33 Most Accurate Estimate and the Zacks Consensus Estimate of $1.31. Magellan Midstream Partners is one of a large database 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.
MMP is one of just a large database of Oils and Energy stocks with positive ESPs. Another solid-looking stock is Energy Transfer LP (ET - Free Report) .
Energy Transfer LP is a Zacks Rank #1 (Strong Buy) stock, and is getting ready to report earnings on February 15, 2023. ET's Most Accurate Estimate sits at $0.40 a share 27 days from its next earnings release.
Energy Transfer LP's Earnings ESP figure currently stands at +18.52% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.34.
MMP and ET'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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How to Boost Your Portfolio with Top Oils and Energy Stocks Set to Beat Earnings
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.
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.
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.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
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 Magellan Midstream Partners?
The final step today is to look at a stock that meets our ESP qualifications. Magellan Midstream Partners earns a #2 (Buy) 14 days from its next quarterly earnings release on February 2, 2023, and its Most Accurate Estimate comes in at $1.33 a share.
MMP has an Earnings ESP figure of +1.62%, which, as explained above, is calculated by taking the percentage difference between the $1.33 Most Accurate Estimate and the Zacks Consensus Estimate of $1.31. Magellan Midstream Partners is one of a large database 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.
MMP is one of just a large database of Oils and Energy stocks with positive ESPs. Another solid-looking stock is Energy Transfer LP (ET - Free Report) .
Energy Transfer LP is a Zacks Rank #1 (Strong Buy) stock, and is getting ready to report earnings on February 15, 2023. ET's Most Accurate Estimate sits at $0.40 a share 27 days from its next earnings release.
Energy Transfer LP's Earnings ESP figure currently stands at +18.52% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.34.
MMP and ET'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 >>