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Want Better Returns? Don?t Ignore These 2 Basic Materials Stocks Set to Beat Earnings
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Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
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.
The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% 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 Bunge?
The final step today is to look at a stock that meets our ESP qualifications. Bunge (BG - Free Report) earns a #3 (Hold) 16 days from its next quarterly earnings release on May 3, 2023, and its Most Accurate Estimate comes in at $3.44 a share.
By taking the percentage difference between the $3.44 Most Accurate Estimate and the $3.41 Zacks Consensus Estimate, Bunge has an Earnings ESP of +0.73%. Investors should also know that BG 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.
BG is just one of a large group of Basic Materials stocks with a positive ESP figure. Freeport-McMoRan (FCX - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on April 21, 2023, Freeport-McMoRan holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.47 a share four days from its next quarterly update.
Freeport-McMoRan's Earnings ESP figure currently stands at +7.83% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.43.
BG and FCX'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 Basic Materials Stocks Set to Beat Earnings
Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
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.
The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% 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 Bunge?
The final step today is to look at a stock that meets our ESP qualifications. Bunge (BG - Free Report) earns a #3 (Hold) 16 days from its next quarterly earnings release on May 3, 2023, and its Most Accurate Estimate comes in at $3.44 a share.
By taking the percentage difference between the $3.44 Most Accurate Estimate and the $3.41 Zacks Consensus Estimate, Bunge has an Earnings ESP of +0.73%. Investors should also know that BG 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.
BG is just one of a large group of Basic Materials stocks with a positive ESP figure. Freeport-McMoRan (FCX - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on April 21, 2023, Freeport-McMoRan holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.47 a share four days from its next quarterly update.
Freeport-McMoRan's Earnings ESP figure currently stands at +7.83% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.43.
BG and FCX'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 >>