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How to Boost Your Portfolio with Top Medical Stocks Set to Beat Earnings
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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.
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, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
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.
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 Assertio?
The final step today is to look at a stock that meets our ESP qualifications. Assertio (ASRT - Free Report) earns a #3 (Hold) nine days from its next quarterly earnings release on March 8, 2023, and its Most Accurate Estimate comes in at $0.76 a share.
By taking the percentage difference between the $0.76 Most Accurate Estimate and the $0.57 Zacks Consensus Estimate, Assertio has an Earnings ESP of +32.56%. Investors should also know that ASRT 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.
ASRT is part of a big group of Medical stocks that boast a positive ESP, and investors may want to take a look at Exact Sciences (EXAS - Free Report) as well.
Exact Sciences, which is readying to report earnings on April 25, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently -$0.77 a share, and EXAS is 57 days out from its next earnings report.
The Zacks Consensus Estimate for Exact Sciences is -$0.80, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +4.47%.
ASRT and EXAS' 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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How to Boost Your Portfolio with Top Medical Stocks Set to Beat Earnings
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.
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, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
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.
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 Assertio?
The final step today is to look at a stock that meets our ESP qualifications. Assertio (ASRT - Free Report) earns a #3 (Hold) nine days from its next quarterly earnings release on March 8, 2023, and its Most Accurate Estimate comes in at $0.76 a share.
By taking the percentage difference between the $0.76 Most Accurate Estimate and the $0.57 Zacks Consensus Estimate, Assertio has an Earnings ESP of +32.56%. Investors should also know that ASRT 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.
ASRT is part of a big group of Medical stocks that boast a positive ESP, and investors may want to take a look at Exact Sciences (EXAS - Free Report) as well.
Exact Sciences, which is readying to report earnings on April 25, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently -$0.77 a share, and EXAS is 57 days out from its next earnings report.
The Zacks Consensus Estimate for Exact Sciences is -$0.80, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +4.47%.
ASRT and EXAS' 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 >>