We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Investors Need to Take Advantage of These 2 Retail and Wholesale Stocks Now
Read MoreHide Full Article
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.
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.
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 Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.
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.
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.
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 Tractor Supply?
The final step today is to look at a stock that meets our ESP qualifications. Tractor Supply (TSCO - Free Report) earns a #2 (Buy) two days from its next quarterly earnings release on April 25, 2024, and its Most Accurate Estimate comes in at $1.71 a share.
Tractor Supply's Earnings ESP sits at +0.5%, which, as explained above, is calculated by taking the percentage difference between the $1.71 Most Accurate Estimate and the Zacks Consensus Estimate of $1.70. TSCO 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.
TSCO is just one of a large group of Retail and Wholesale stocks with a positive ESP figure. Texas Roadhouse (TXRH - Free Report) is another qualifying stock you may want to consider.
Texas Roadhouse is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on May 2, 2024. TXRH's Most Accurate Estimate sits at $1.66 a share nine days from its next earnings release.
Texas Roadhouse's Earnings ESP figure currently stands at +0.27% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.65.
TSCO and TXRH'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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Investors Need to Take Advantage of These 2 Retail and Wholesale Stocks Now
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.
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.
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 Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.
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.
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.
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 Tractor Supply?
The final step today is to look at a stock that meets our ESP qualifications. Tractor Supply (TSCO - Free Report) earns a #2 (Buy) two days from its next quarterly earnings release on April 25, 2024, and its Most Accurate Estimate comes in at $1.71 a share.
Tractor Supply's Earnings ESP sits at +0.5%, which, as explained above, is calculated by taking the percentage difference between the $1.71 Most Accurate Estimate and the Zacks Consensus Estimate of $1.70. TSCO 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.
TSCO is just one of a large group of Retail and Wholesale stocks with a positive ESP figure. Texas Roadhouse (TXRH - Free Report) is another qualifying stock you may want to consider.
Texas Roadhouse is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on May 2, 2024. TXRH's Most Accurate Estimate sits at $1.66 a share nine days from its next earnings release.
Texas Roadhouse's Earnings ESP figure currently stands at +0.27% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.65.
TSCO and TXRH'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 >>