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Looking for Stocks with Positive Earnings Momentum? Check Out These 2 Aerospace Names
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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.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
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.
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 TransDigm Group?
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. TransDigm Group (TDG - Free Report) holds a #2 (Buy) at the moment and its Most Accurate Estimate comes in at $8.57 a share seven days away from its upcoming earnings release on August 6, 2024.
TransDigm Group's Earnings ESP sits at +1.41%, which, as explained above, is calculated by taking the percentage difference between the $8.57 Most Accurate Estimate and the Zacks Consensus Estimate of $8.45. TDG 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.
TDG is just one of a large group of Aerospace stocks with a positive ESP figure. FTAI Aviation (FTAI - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on October 23, 2024, FTAI Aviation holds a #1 (Strong Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.76 a share 85 days from its next quarterly update.
FTAI Aviation's Earnings ESP figure currently stands at +19.24% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.64.
TDG and FTAI'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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Looking for Stocks with Positive Earnings Momentum? Check Out These 2 Aerospace Names
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.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
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.
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 TransDigm Group?
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. TransDigm Group (TDG - Free Report) holds a #2 (Buy) at the moment and its Most Accurate Estimate comes in at $8.57 a share seven days away from its upcoming earnings release on August 6, 2024.
TransDigm Group's Earnings ESP sits at +1.41%, which, as explained above, is calculated by taking the percentage difference between the $8.57 Most Accurate Estimate and the Zacks Consensus Estimate of $8.45. TDG 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.
TDG is just one of a large group of Aerospace stocks with a positive ESP figure. FTAI Aviation (FTAI - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on October 23, 2024, FTAI Aviation holds a #1 (Strong Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.76 a share 85 days from its next quarterly update.
FTAI Aviation's Earnings ESP figure currently stands at +19.24% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.64.
TDG and FTAI'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 >>