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Why Investors Need to Take Advantage of These 2 Retail and Wholesale Stocks Now
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Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive 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 Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
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.
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 Booking Holdings?
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. Booking Holdings (BKNG - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $78.53 a share 26 days away from its upcoming earnings release on October 30, 2024.
Booking Holdings' Earnings ESP sits at +1.09%, which, as explained above, is calculated by taking the percentage difference between the $78.53 Most Accurate Estimate and the Zacks Consensus Estimate of $77.68. BKNG 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.
BKNG is one of just a large database of Retail and Wholesale stocks with positive ESPs. Another solid-looking stock is MercadoLibre (MELI - Free Report) .
MercadoLibre, which is readying to report earnings on November 6, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $16.58 a share, and MELI is 33 days out from its next earnings report.
MercadoLibre's Earnings ESP figure currently stands at +47.8% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $11.22.
BKNG and MELI'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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Why Investors Need to Take Advantage of These 2 Retail and Wholesale Stocks Now
Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive 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 Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
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.
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 Booking Holdings?
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. Booking Holdings (BKNG - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $78.53 a share 26 days away from its upcoming earnings release on October 30, 2024.
Booking Holdings' Earnings ESP sits at +1.09%, which, as explained above, is calculated by taking the percentage difference between the $78.53 Most Accurate Estimate and the Zacks Consensus Estimate of $77.68. BKNG 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.
BKNG is one of just a large database of Retail and Wholesale stocks with positive ESPs. Another solid-looking stock is MercadoLibre (MELI - Free Report) .
MercadoLibre, which is readying to report earnings on November 6, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $16.58 a share, and MELI is 33 days out from its next earnings report.
MercadoLibre's Earnings ESP figure currently stands at +47.8% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $11.22.
BKNG and MELI'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 >>