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How to Find Strong Retail and Wholesale Stocks Slated for Positive Earnings Surprises
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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.
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.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.
Should You Consider Abercrombie & Fitch?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Abercrombie & Fitch (ANF - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $2.25 a share, just 14 days from its upcoming earnings release on August 28, 2024.
By taking the percentage difference between the $2.25 Most Accurate Estimate and the $2.13 Zacks Consensus Estimate, Abercrombie & Fitch has an Earnings ESP of +5.4%. Investors should also know that ANF 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.
ANF is one of just a large database of Retail and Wholesale stocks with positive ESPs. Another solid-looking stock is Kohl's (KSS - Free Report) .
Slated to report earnings on August 28, 2024, Kohl's holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.54 a share 14 days from its next quarterly update.
For Kohl's, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.49 is +11.18%.
Because both stocks hold a positive Earnings ESP, ANF and KSS 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 Find Strong Retail and Wholesale 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.
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.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.
Should You Consider Abercrombie & Fitch?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Abercrombie & Fitch (ANF - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $2.25 a share, just 14 days from its upcoming earnings release on August 28, 2024.
By taking the percentage difference between the $2.25 Most Accurate Estimate and the $2.13 Zacks Consensus Estimate, Abercrombie & Fitch has an Earnings ESP of +5.4%. Investors should also know that ANF 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.
ANF is one of just a large database of Retail and Wholesale stocks with positive ESPs. Another solid-looking stock is Kohl's (KSS - Free Report) .
Slated to report earnings on August 28, 2024, Kohl's holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.54 a share 14 days from its next quarterly update.
For Kohl's, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.49 is +11.18%.
Because both stocks hold a positive Earnings ESP, ANF and KSS 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 >>