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How to Boost Your Portfolio with Top Auto, Tires and Trucks 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.
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.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
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.
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.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 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 BorgWarner?
The final step today is to look at a stock that meets our ESP qualifications. BorgWarner (BWA - Free Report) earns a #3 (Hold) two days from its next quarterly earnings release on May 4, 2023, and its Most Accurate Estimate comes in at $1.20 a share.
BWA has an Earnings ESP figure of +5.88%, which, as explained above, is calculated by taking the percentage difference between the $1.20 Most Accurate Estimate and the Zacks Consensus Estimate of $1.13. BorgWarner 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.
BWA is just one of a large group of Auto, Tires and Trucks stocks with a positive ESP figure. CNH Industrial is another qualifying stock you may want to consider.
Slated to report earnings on May 5, 2023, CNH Industrial holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.32 a share three days from its next quarterly update.
CNH Industrial's Earnings ESP figure currently stands at +0.13% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.32.
Because both stocks hold a positive Earnings ESP, BWA and CNHI could potentially post earnings beats in their next reports.
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 Auto, Tires and Trucks 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.
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.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
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.
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.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 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 BorgWarner?
The final step today is to look at a stock that meets our ESP qualifications. BorgWarner (BWA - Free Report) earns a #3 (Hold) two days from its next quarterly earnings release on May 4, 2023, and its Most Accurate Estimate comes in at $1.20 a share.
BWA has an Earnings ESP figure of +5.88%, which, as explained above, is calculated by taking the percentage difference between the $1.20 Most Accurate Estimate and the Zacks Consensus Estimate of $1.13. BorgWarner 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.
BWA is just one of a large group of Auto, Tires and Trucks stocks with a positive ESP figure. CNH Industrial is another qualifying stock you may want to consider.
Slated to report earnings on May 5, 2023, CNH Industrial holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.32 a share three days from its next quarterly update.
CNH Industrial's Earnings ESP figure currently stands at +0.13% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.32.
Because both stocks hold a positive Earnings ESP, BWA and CNHI could potentially post earnings beats in their next reports.
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 >>