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Why Investors Need to Take Advantage of These 2 Retail and Wholesale Stocks Now
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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.
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 Williams-Sonoma?
The final step today is to look at a stock that meets our ESP qualifications. Williams-Sonoma (WSM - Free Report) earns a #3 (Hold) 16 days from its next quarterly earnings release on August 28, 2024, and its Most Accurate Estimate comes in at $1.68 a share.
WSM has an Earnings ESP figure of +15.87%, which, as explained above, is calculated by taking the percentage difference between the $1.68 Most Accurate Estimate and the Zacks Consensus Estimate of $1.45. Williams-Sonoma 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.
WSM is part of a big group of Retail and Wholesale stocks that boast a positive ESP, and investors may want to take a look at TJX (TJX - Free Report) as well.
TJX, which is readying to report earnings on August 21, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.97 a share, and TJX is nine days out from its next earnings report.
The Zacks Consensus Estimate for TJX is $0.91, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +6.3%.
Because both stocks hold a positive Earnings ESP, WSM and TJX 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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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.
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.
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 Williams-Sonoma?
The final step today is to look at a stock that meets our ESP qualifications. Williams-Sonoma (WSM - Free Report) earns a #3 (Hold) 16 days from its next quarterly earnings release on August 28, 2024, and its Most Accurate Estimate comes in at $1.68 a share.
WSM has an Earnings ESP figure of +15.87%, which, as explained above, is calculated by taking the percentage difference between the $1.68 Most Accurate Estimate and the Zacks Consensus Estimate of $1.45. Williams-Sonoma 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.
WSM is part of a big group of Retail and Wholesale stocks that boast a positive ESP, and investors may want to take a look at TJX (TJX - Free Report) as well.
TJX, which is readying to report earnings on August 21, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.97 a share, and TJX is nine days out from its next earnings report.
The Zacks Consensus Estimate for TJX is $0.91, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +6.3%.
Because both stocks hold a positive Earnings ESP, WSM and TJX 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 >>