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Why Investors Need to Take Advantage of These 2 Computer and Technology Stocks Now
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Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
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.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
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.
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 T-Mobile?
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. T-Mobile (TMUS - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $2.36 a share, just 21 days from its upcoming earnings release on October 23, 2024.
By taking the percentage difference between the $2.36 Most Accurate Estimate and the $2.34 Zacks Consensus Estimate, T-Mobile has an Earnings ESP of +0.7%. Investors should also know that TMUS 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.
TMUS is just one of a large group of Computer and Technology stocks with a positive ESP figure. Amkor Technology (AMKR - Free Report) is another qualifying stock you may want to consider.
Amkor Technology is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on November 4, 2024. AMKR's Most Accurate Estimate sits at $0.50 a share 33 days from its next earnings release.
For Amkor Technology, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.50 is +0.81%.
TMUS and AMKR's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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 Computer and Technology Stocks Now
Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
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.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
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.
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 T-Mobile?
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. T-Mobile (TMUS - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $2.36 a share, just 21 days from its upcoming earnings release on October 23, 2024.
By taking the percentage difference between the $2.36 Most Accurate Estimate and the $2.34 Zacks Consensus Estimate, T-Mobile has an Earnings ESP of +0.7%. Investors should also know that TMUS 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.
TMUS is just one of a large group of Computer and Technology stocks with a positive ESP figure. Amkor Technology (AMKR - Free Report) is another qualifying stock you may want to consider.
Amkor Technology is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on November 4, 2024. AMKR's Most Accurate Estimate sits at $0.50 a share 33 days from its next earnings release.
For Amkor Technology, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.50 is +0.81%.
TMUS and AMKR's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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 >>