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Want Better Returns? Don?t Ignore These 2 Finance 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.
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 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.
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 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 Blackstone Inc.
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. Blackstone Inc. (BX - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.98 a share, just seven days from its upcoming earnings release on April 20, 2023.
Blackstone Inc.'s Earnings ESP sits at +1.43%, which, as explained above, is calculated by taking the percentage difference between the $0.98 Most Accurate Estimate and the Zacks Consensus Estimate of $0.96. BX 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.
BX is one of just a large database of Finance stocks with positive ESPs. Another solid-looking stock is AGNC Investment (AGNC - Free Report) .
Slated to report earnings on April 24, 2023, AGNC Investment holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.63 a share 11 days from its next quarterly update.
The Zacks Consensus Estimate for AGNC Investment is $0.61, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +3.7%.
BX and AGNC'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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Want Better Returns? Don?t Ignore These 2 Finance 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.
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 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.
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 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 Blackstone Inc.
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. Blackstone Inc. (BX - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.98 a share, just seven days from its upcoming earnings release on April 20, 2023.
Blackstone Inc.'s Earnings ESP sits at +1.43%, which, as explained above, is calculated by taking the percentage difference between the $0.98 Most Accurate Estimate and the Zacks Consensus Estimate of $0.96. BX 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.
BX is one of just a large database of Finance stocks with positive ESPs. Another solid-looking stock is AGNC Investment (AGNC - Free Report) .
Slated to report earnings on April 24, 2023, AGNC Investment holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.63 a share 11 days from its next quarterly update.
The Zacks Consensus Estimate for AGNC Investment is $0.61, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +3.7%.
BX and AGNC'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 >>