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These 2 Oils and Energy Stocks Could Beat Earnings: Why They Should Be on Your Radar
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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 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.
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 Western Midstream?
The final step today is to look at a stock that meets our ESP qualifications. Western Midstream (WES - Free Report) earns a #3 (Hold) 23 days from its next quarterly earnings release on November 6, 2024, and its Most Accurate Estimate comes in at $0.88 a share.
WES has an Earnings ESP figure of +4.35%, which, as explained above, is calculated by taking the percentage difference between the $0.88 Most Accurate Estimate and the Zacks Consensus Estimate of $0.84. Western Midstream 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.
WES is part of a big group of Oils and Energy stocks that boast a positive ESP, and investors may want to take a look at Kinder Morgan (KMI - Free Report) as well.
Kinder Morgan, which is readying to report earnings on October 16, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.28 a share, and KMI is two days out from its next earnings report.
Kinder Morgan's Earnings ESP figure currently stands at +3.7% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.27.
Because both stocks hold a positive Earnings ESP, WES and KMI 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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These 2 Oils and Energy Stocks Could Beat Earnings: Why They Should Be on Your Radar
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 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.
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 Western Midstream?
The final step today is to look at a stock that meets our ESP qualifications. Western Midstream (WES - Free Report) earns a #3 (Hold) 23 days from its next quarterly earnings release on November 6, 2024, and its Most Accurate Estimate comes in at $0.88 a share.
WES has an Earnings ESP figure of +4.35%, which, as explained above, is calculated by taking the percentage difference between the $0.88 Most Accurate Estimate and the Zacks Consensus Estimate of $0.84. Western Midstream 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.
WES is part of a big group of Oils and Energy stocks that boast a positive ESP, and investors may want to take a look at Kinder Morgan (KMI - Free Report) as well.
Kinder Morgan, which is readying to report earnings on October 16, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.28 a share, and KMI is two days out from its next earnings report.
Kinder Morgan's Earnings ESP figure currently stands at +3.7% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.27.
Because both stocks hold a positive Earnings ESP, WES and KMI 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 >>