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Find Strong Stocks During Earnings Season with this First Profit Screener
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The real heavyweights of technology started to report their results in the last week of April. Through Tuesday, Tesla, Microsoft, and Alphabet Inc. all reported impressive financials, with Apple, Facebook, Amazon, and others all due out later in the week. The positive start to Q1 FY21 earnings season for big tech helps justify the Nasdaq’s rather quick comeback that saw it post new highs Monday for the first time since mid-February.
The strength of the market and the bullish sentiment, spurred by the vaccine, the possibility of 6% or higher GDP growth, and more, has also continued to propel the broader market resurgence outside of tech that helped the Dow close at records throughout the year and push the S&P 500 to new highs Monday.
Given this backdrop and the constantly improving earnings outlook, investors might want to think about adding to their portfolios even with stocks right at new highs. So let’s use our ‘First Profit’ screener to help find strong stocks to consider buying…
First Profit
The idea is to search for companies that recently reported their first quarterly profit. More specifically, the screen searches for firms that just posted their first profit last quarter, after not posting a profit for at least the previous four quarters.
Finding companies that recently reported their first profits help investors find stocks that can prove to be big winners. These companies may vary widely. Some of the firms might be new, and this recent profit is perhaps the only profit in its short history.
Meanwhile, other companies might have held an impressive and long history of quarterly profitability, but for whatever reason haven't seen a profit in a while. Therefore, the return to profit could spark a turning point that management had promised or Wall Street had been clamoring for.
The concept is relatively simple: if the trend has been one of improvement, there is a solid chance the trend will continue. This is true whether a company has been profitable, or is just reaching that key inflection point.
And that’s what we are screening for today…
• EPS for the previous 4 Quarters less than or equal to 0
(This means in each of the previous 4 quarters (except the most recently reported quarter) the company has reported earnings of less than or equal to zero, i.e., no profit.)
• EPS for the recently reported quarter greater than 0
(This time, the company reported earnings greater than zero, meaning they finally showed a profit.)
• Current Price greater than or equal to 5
(Stocks that are trading for less than $5 are more speculative.)
The screen is pretty simple, yet powerful. Here are 3 of the over 50 stocks that made it through this week's screen…
Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.
Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.
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.
It's hard to believe, even for us at Zacks. But from 2000-2020, while the market gained +6.6% per year, our top stock-picking strategy averaged +52.4% per year.
How has that screen done lately? From 2016-2020, it more than tripled the market's +103.9% gain with a soaring +381.1% return.
Image: Bigstock
Find Strong Stocks During Earnings Season with this First Profit Screener
The real heavyweights of technology started to report their results in the last week of April. Through Tuesday, Tesla, Microsoft, and Alphabet Inc. all reported impressive financials, with Apple, Facebook, Amazon, and others all due out later in the week. The positive start to Q1 FY21 earnings season for big tech helps justify the Nasdaq’s rather quick comeback that saw it post new highs Monday for the first time since mid-February.
The strength of the market and the bullish sentiment, spurred by the vaccine, the possibility of 6% or higher GDP growth, and more, has also continued to propel the broader market resurgence outside of tech that helped the Dow close at records throughout the year and push the S&P 500 to new highs Monday.
Given this backdrop and the constantly improving earnings outlook, investors might want to think about adding to their portfolios even with stocks right at new highs. So let’s use our ‘First Profit’ screener to help find strong stocks to consider buying…
First Profit
The idea is to search for companies that recently reported their first quarterly profit. More specifically, the screen searches for firms that just posted their first profit last quarter, after not posting a profit for at least the previous four quarters.
Finding companies that recently reported their first profits help investors find stocks that can prove to be big winners. These companies may vary widely. Some of the firms might be new, and this recent profit is perhaps the only profit in its short history.
Meanwhile, other companies might have held an impressive and long history of quarterly profitability, but for whatever reason haven't seen a profit in a while. Therefore, the return to profit could spark a turning point that management had promised or Wall Street had been clamoring for.
The concept is relatively simple: if the trend has been one of improvement, there is a solid chance the trend will continue. This is true whether a company has been profitable, or is just reaching that key inflection point.
And that’s what we are screening for today…
• EPS for the previous 4 Quarters less than or equal to 0
(This means in each of the previous 4 quarters (except the most recently reported quarter) the company has reported earnings of less than or equal to zero, i.e., no profit.)
• EPS for the recently reported quarter greater than 0
(This time, the company reported earnings greater than zero, meaning they finally showed a profit.)
• Current Price greater than or equal to 5
(Stocks that are trading for less than $5 are more speculative.)
The screen is pretty simple, yet powerful. Here are 3 of the over 50 stocks that made it through this week's screen…
BioNTech SE ADR (BNTX - Free Report)
Chewy Inc. (CHWY - Free Report)
Upwork Inc. (UPWK - Free Report)
Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.
Click here to sign up for a free trial to the Research Wizard today.
Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.
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.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance/.
Zacks' Super Screen
It's hard to believe, even for us at Zacks. But from 2000-2020, while the market gained +6.6% per year, our top stock-picking strategy averaged +52.4% per year.
How has that screen done lately? From 2016-2020, it more than tripled the market's +103.9% gain with a soaring +381.1% return.
Free – See the Stocks It Turned Up for Today >>