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Why Investors Need to Take Advantage of These 2 Retail and Wholesale Stocks Now
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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.
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.
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.
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.
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.
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 Macy's?
The final step today is to look at a stock that meets our ESP qualifications. Macy's (M - Free Report) earns a #3 (Hold) four days from its next quarterly earnings release on August 22, 2023, and its Most Accurate Estimate comes in at $0.14 a share.
Macy's Earnings ESP sits at +6.59%, which, as explained above, is calculated by taking the percentage difference between the $0.14 Most Accurate Estimate and the Zacks Consensus Estimate of $0.13. M 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.
M is one of just a large database of Retail and Wholesale stocks with positive ESPs. Another solid-looking stock is Costco (COST - Free Report) .
Slated to report earnings on September 26, 2023, Costco holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $4.77 a share 39 days from its next quarterly update.
Costco's Earnings ESP figure currently stands at +1.08% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $4.72.
Because both stocks hold a positive Earnings ESP, M and COST 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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Why Investors Need to Take Advantage of These 2 Retail and Wholesale Stocks Now
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.
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.
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.
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.
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.
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 Macy's?
The final step today is to look at a stock that meets our ESP qualifications. Macy's (M - Free Report) earns a #3 (Hold) four days from its next quarterly earnings release on August 22, 2023, and its Most Accurate Estimate comes in at $0.14 a share.
Macy's Earnings ESP sits at +6.59%, which, as explained above, is calculated by taking the percentage difference between the $0.14 Most Accurate Estimate and the Zacks Consensus Estimate of $0.13. M 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.
M is one of just a large database of Retail and Wholesale stocks with positive ESPs. Another solid-looking stock is Costco (COST - Free Report) .
Slated to report earnings on September 26, 2023, Costco holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $4.77 a share 39 days from its next quarterly update.
Costco's Earnings ESP figure currently stands at +1.08% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $4.72.
Because both stocks hold a positive Earnings ESP, M and COST 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 >>