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These 2 Oils and Energy Stocks Could Beat Earnings: Why They Should Be on Your Radar
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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.
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.
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.
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 Ormat Technologies?
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. Ormat Technologies (ORA - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.42 a share, just 26 days from its upcoming earnings release on August 2, 2023.
By taking the percentage difference between the $0.42 Most Accurate Estimate and the $0.40 Zacks Consensus Estimate, Ormat Technologies has an Earnings ESP of +6.33%. Investors should also know that ORA 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.
ORA is part of a big group of Oils and Energy stocks that boast a positive ESP, and investors may want to take a look at Baker Hughes (BKR - Free Report) as well.
Baker Hughes, which is readying to report earnings on July 19, 2023, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $0.33 a share, and BKR is 12 days out from its next earnings report.
Baker Hughes' Earnings ESP figure currently stands at +1.36% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.33.
ORA and BKR'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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These 2 Oils and Energy Stocks Could Beat Earnings: Why They Should Be on Your Radar
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.
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.
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.
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 Ormat Technologies?
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. Ormat Technologies (ORA - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $0.42 a share, just 26 days from its upcoming earnings release on August 2, 2023.
By taking the percentage difference between the $0.42 Most Accurate Estimate and the $0.40 Zacks Consensus Estimate, Ormat Technologies has an Earnings ESP of +6.33%. Investors should also know that ORA 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.
ORA is part of a big group of Oils and Energy stocks that boast a positive ESP, and investors may want to take a look at Baker Hughes (BKR - Free Report) as well.
Baker Hughes, which is readying to report earnings on July 19, 2023, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $0.33 a share, and BKR is 12 days out from its next earnings report.
Baker Hughes' Earnings ESP figure currently stands at +1.36% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.33.
ORA and BKR'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 >>