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Why Investors Need to Take Advantage of These 2 Oils and Energy Stocks Now
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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.
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, 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 #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 Civitas Resources?
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. Civitas Resources (CIVI - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $2.65 a share, just eight days from its upcoming earnings release on November 7, 2023.
By taking the percentage difference between the $2.65 Most Accurate Estimate and the $2.47 Zacks Consensus Estimate, Civitas Resources has an Earnings ESP of +7.46%. Investors should also know that CIVI 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.
CIVI is one of just a large database of Oils and Energy stocks with positive ESPs. Another solid-looking stock is Devon Energy (DVN - Free Report) .
Slated to report earnings on November 7, 2023, Devon Energy holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.56 a share eight days from its next quarterly update.
Devon Energy's Earnings ESP figure currently stands at +0.72% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.55.
CIVI and DVN'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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Why Investors Need to Take Advantage of These 2 Oils and Energy Stocks Now
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.
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, 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 #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 Civitas Resources?
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. Civitas Resources (CIVI - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $2.65 a share, just eight days from its upcoming earnings release on November 7, 2023.
By taking the percentage difference between the $2.65 Most Accurate Estimate and the $2.47 Zacks Consensus Estimate, Civitas Resources has an Earnings ESP of +7.46%. Investors should also know that CIVI 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.
CIVI is one of just a large database of Oils and Energy stocks with positive ESPs. Another solid-looking stock is Devon Energy (DVN - Free Report) .
Slated to report earnings on November 7, 2023, Devon Energy holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.56 a share eight days from its next quarterly update.
Devon Energy's Earnings ESP figure currently stands at +0.72% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.55.
CIVI and DVN'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 >>