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Zacks.com featured highlights include: Caterpillar, Twitter, GATX, ABIOMED and Amazon.com
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For Immediate Release
Chicago, IL – May 24, 2018 - Stocks in this week’s article Caterpillar Inc. (CAT - Free Report) , Twitter Inc. , GATX Corporation (GATX - Free Report) , ABIOMED Inc. and Amazon.com Inc. (AMZN - Free Report) .
5 Top-Ranked Stocks Gearing Up for an Earnings Beat
What drives shares or pulls them down after a company comes up with quarterly earnings? It’s not exactly how well a company performed in the recently concluded quarter or exhibited strong growth; it is an earnings beat or a miss which drives the market post release.
This is because investors always intend to position ahead of time and fish for stocks that are likely to come up with an astounding performance. After much deliberation, Wall Street analysts forecast earnings of companies. These estimates act as investment leads.
The Importance of an Earnings Beat
A positive earnings surprise or an earnings beat is typically the case when actual or reported earnings come in above the consensus estimate. Historically, if a company’s earnings manage to beat market expectations, its stock surges post release.
After all, a 20% earnings rise (though it looks good apparently) doesn’t tell you if it is a decelerating growth momentum. If that is the case, the company’s fundamentals are in serious question.
Also, seasonal fluctuations are a vital factor in determining a company’s earnings growth. If a company’s Q1 is seasonally weak and its Q4 is strong, then it is likely to report a sequential decline in earnings in Q1. In such cases, the growth rates are fallacious when it comes to analyzing the true picture of a company.
On the other hand, Wall Street analysts club their insights and the company’s guidance to derive an earnings estimate. Thus, beating this key number is almost equivalent to beating the company’s own expectation as well as the market perception. And if the margin of surprise is big, it typically drives the stock higher right after the release.
How to Find Stocks that Can Beat?
Now, since it is difficult to foretell if a company will beat or miss in the upcoming earnings season, investors can check its earnings surprise history. An impressive track record generally acts as a tailwind, sending the stock higher. It indicates that the company might surpass estimates even in its next release.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks.com featured highlights include: Caterpillar, Twitter, GATX, ABIOMED and Amazon.com
For Immediate Release
Chicago, IL – May 24, 2018 - Stocks in this week’s article Caterpillar Inc. (CAT - Free Report) , Twitter Inc. , GATX Corporation (GATX - Free Report) , ABIOMED Inc. and Amazon.com Inc. (AMZN - Free Report) .
5 Top-Ranked Stocks Gearing Up for an Earnings Beat
What drives shares or pulls them down after a company comes up with quarterly earnings? It’s not exactly how well a company performed in the recently concluded quarter or exhibited strong growth; it is an earnings beat or a miss which drives the market post release.
This is because investors always intend to position ahead of time and fish for stocks that are likely to come up with an astounding performance. After much deliberation, Wall Street analysts forecast earnings of companies. These estimates act as investment leads.
The Importance of an Earnings Beat
A positive earnings surprise or an earnings beat is typically the case when actual or reported earnings come in above the consensus estimate. Historically, if a company’s earnings manage to beat market expectations, its stock surges post release.
After all, a 20% earnings rise (though it looks good apparently) doesn’t tell you if it is a decelerating growth momentum. If that is the case, the company’s fundamentals are in serious question.
Also, seasonal fluctuations are a vital factor in determining a company’s earnings growth. If a company’s Q1 is seasonally weak and its Q4 is strong, then it is likely to report a sequential decline in earnings in Q1. In such cases, the growth rates are fallacious when it comes to analyzing the true picture of a company.
On the other hand, Wall Street analysts club their insights and the company’s guidance to derive an earnings estimate. Thus, beating this key number is almost equivalent to beating the company’s own expectation as well as the market perception. And if the margin of surprise is big, it typically drives the stock higher right after the release.
How to Find Stocks that Can Beat?
Now, since it is difficult to foretell if a company will beat or miss in the upcoming earnings season, investors can check its earnings surprise history. An impressive track record generally acts as a tailwind, sending the stock higher. It indicates that the company might surpass estimates even in its next release.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/304602/5-topranked-stocks-gearing-up-for-an-earnings-beat
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.