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.
How to Find Strong Computer and Technology Stocks Slated for Positive Earnings Surprises
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.
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.
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 Axcelis Technologies?
The final step today is to look at a stock that meets our ESP qualifications. Axcelis Technologies (ACLS - Free Report) earns a #1 (Strong Buy) 14 days from its next quarterly earnings release on July 31, 2024, and its Most Accurate Estimate comes in at $1.39 a share.
By taking the percentage difference between the $1.39 Most Accurate Estimate and the $1.35 Zacks Consensus Estimate, Axcelis Technologies has an Earnings ESP of +2.97%. Investors should also know that ACLS 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.
ACLS is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Apple (AAPL - Free Report) .
Apple is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on August 1, 2024. AAPL's Most Accurate Estimate sits at $1.38 a share 15 days from its next earnings release.
The Zacks Consensus Estimate for Apple is $1.33, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +3.23%.
Because both stocks hold a positive Earnings ESP, ACLS and AAPL 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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
How to Find Strong Computer and Technology Stocks Slated for Positive Earnings Surprises
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.
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.
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 Axcelis Technologies?
The final step today is to look at a stock that meets our ESP qualifications. Axcelis Technologies (ACLS - Free Report) earns a #1 (Strong Buy) 14 days from its next quarterly earnings release on July 31, 2024, and its Most Accurate Estimate comes in at $1.39 a share.
By taking the percentage difference between the $1.39 Most Accurate Estimate and the $1.35 Zacks Consensus Estimate, Axcelis Technologies has an Earnings ESP of +2.97%. Investors should also know that ACLS 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.
ACLS is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Apple (AAPL - Free Report) .
Apple is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on August 1, 2024. AAPL's Most Accurate Estimate sits at $1.38 a share 15 days from its next earnings release.
The Zacks Consensus Estimate for Apple is $1.33, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +3.23%.
Because both stocks hold a positive Earnings ESP, ACLS and AAPL 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 >>