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How to Boost Your Portfolio with Top Oils and Energy 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.
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.
The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
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 Suncor Energy?
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. Suncor Energy (SU - Free Report) holds a #1 (Strong Buy) at the moment and its Most Accurate Estimate comes in at $0.80 a share 25 days away from its upcoming earnings release on August 12, 2024.
SU has an Earnings ESP figure of +5.73%, which, as explained above, is calculated by taking the percentage difference between the $0.80 Most Accurate Estimate and the Zacks Consensus Estimate of $0.76. Suncor Energy 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.
SU is just one of a large group of Oils and Energy stocks with a positive ESP figure. GE Vernova (GEV - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on July 24, 2024, GE Vernova holds a #1 (Strong Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.76 a share six days from its next quarterly update.
The Zacks Consensus Estimate for GE Vernova is $0.69, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +10.15%.
Because both stocks hold a positive Earnings ESP, SU and GEV 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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How to Boost Your Portfolio with Top Oils and Energy 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.
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.
The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
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 Suncor Energy?
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. Suncor Energy (SU - Free Report) holds a #1 (Strong Buy) at the moment and its Most Accurate Estimate comes in at $0.80 a share 25 days away from its upcoming earnings release on August 12, 2024.
SU has an Earnings ESP figure of +5.73%, which, as explained above, is calculated by taking the percentage difference between the $0.80 Most Accurate Estimate and the Zacks Consensus Estimate of $0.76. Suncor Energy 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.
SU is just one of a large group of Oils and Energy stocks with a positive ESP figure. GE Vernova (GEV - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on July 24, 2024, GE Vernova holds a #1 (Strong Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.76 a share six days from its next quarterly update.
The Zacks Consensus Estimate for GE Vernova is $0.69, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +10.15%.
Because both stocks hold a positive Earnings ESP, SU and GEV 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 >>