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How to Boost Your Portfolio with Top Medical Stocks Set to Beat Earnings
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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.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these 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 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.
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.
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 Gilead Sciences?
The final step today is to look at a stock that meets our ESP qualifications. Gilead Sciences (GILD - Free Report) earns a #3 (Hold) 27 days from its next quarterly earnings release on August 8, 2024, and its Most Accurate Estimate comes in at $1.63 a share.
GILD has an Earnings ESP figure of +2.76%, which, as explained above, is calculated by taking the percentage difference between the $1.63 Most Accurate Estimate and the Zacks Consensus Estimate of $1.58. Gilead Sciences 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.
GILD is just one of a large group of Medical stocks with a positive ESP figure. Tenet Healthcare (THC - Free Report) is another qualifying stock you may want to consider.
Tenet Healthcare is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on July 24, 2024. THC's Most Accurate Estimate sits at $1.97 a share 12 days from its next earnings release.
Tenet Healthcare's Earnings ESP figure currently stands at +7.26% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.84.
GILD and THC's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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 Medical Stocks Set to Beat Earnings
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.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these 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 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.
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.
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 Gilead Sciences?
The final step today is to look at a stock that meets our ESP qualifications. Gilead Sciences (GILD - Free Report) earns a #3 (Hold) 27 days from its next quarterly earnings release on August 8, 2024, and its Most Accurate Estimate comes in at $1.63 a share.
GILD has an Earnings ESP figure of +2.76%, which, as explained above, is calculated by taking the percentage difference between the $1.63 Most Accurate Estimate and the Zacks Consensus Estimate of $1.58. Gilead Sciences 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.
GILD is just one of a large group of Medical stocks with a positive ESP figure. Tenet Healthcare (THC - Free Report) is another qualifying stock you may want to consider.
Tenet Healthcare is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on July 24, 2024. THC's Most Accurate Estimate sits at $1.97 a share 12 days from its next earnings release.
Tenet Healthcare's Earnings ESP figure currently stands at +7.26% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.84.
GILD and THC's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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 >>