my good friend and Zacks Research Director Sheraz Mian noted in his comments earlier this week, we have entered into the last “major” week of earnings of the S&P
far, total earnings growth for the roughly 320 companies that have already
reported are up 5.3% year over year, about 2/3rds of them beating expectations
with a median surprise of 2.7%. While
that seems like a positive, there are some “details” that we need to be aware
you look back just one quarter (Q1) before the most recent downward analyst
revisions, this quarter’s earnings results would have actually been about 4% lower than
line revenue is also lower on average than it
was in the year ago period which is an indication that overall sales of goods
and services are down. That said, there
are some companies that are truly surprising the markets to the upside and offering bullish
outlooks for the coming year; those companies are being rewarded with huge
We saw this type of action in Netquite last week, which was one of my selections for my
Whisper Trading Service.
It’s fair to say that the most recent earnings season is mediocre
at best, but being that expectations were ridiculously low, the markets are at
least remaining stable. It’s also safe
to assume that the past week’s bullish action can be partially attributed to
strong, supportive words from the likes of Mario Dragi and Mr Juncker on the
stability of the Euro Zone by any means necessary.
The US markets are also looking to the Fed for additional QE
here, but I think that our European friends may have bought the Fed another
month or two until they enact any further stimulus. We will see later today if that thesis holds
About Zacks Earnings ESP
Earnings ESP is Zacks’ proprietary methodology for determining which stocks
have the best chance to surprise with their next earnings announcement. The
Earnings ESP shows the percentage difference between the Most Accurate Estimate
and the Zacks Consensus.
Zacks ESP helps predict earnings surprises to the upside and downside; the
greater the ESP (positive or negative) the greater the likelihood for a
use ESP to help quantify the conviction of the analysts for a surprise and
stack the odds in my favor when I combine it with other measurements and statistics.
can work for bullish potential surprises (positive ESP) as well as bearish
surprises (negative ESP).
check out a few bullish ESP candidates that report over the next week or so:
Bullish ESP Stocks
Sunoco (SUN) - is a Zacks Rank 3 stock with an earnings ESP of 25% for Q2.
Their FY2013 ESP is 7%. Sunoco does have
some weakness in their Q3 and FY2012 ESPs, but hopefully a beat in this quarter
and longer term strength will support the shares.
Zacks consensus estimate is for 47 cents of income this quarter, with the most
accurate estimate at 58 cents. Expectations may be lower because they
have missed analysts expectations for 3 of the last 4 quarters.
Inc. is principally a petroleum refiner and marketer with interests in
cokemaking. Sunoco's petroleum refining and marketing operations include the
manufacturing and marketing of a full range of petroleum products, including
fuels, lubricants and petrochemicals, and the transportation of crude oil and
refined products. These operations are conducted principally in the eastern
half of the United States
– Sunoco reports
earnings on August 2nd AMC (after market close).
Read Analyst Details Here
PHH Corp (PHH - Snapshot Report) - is a Zacks Rank 2 stock with a Q2 earnings
ESP of 22%. The Zacks consensus estimate is for Q2 earnings of $0.82,
with the most accurate estimate at $1.00. PHH Corp has exceeded analysts’
expectations by an average of 24% over the past four quarters.
momentum also looks bullish for the current and next quarters as well as FY2012
Corp is a leading outsource provider of mortgage and vehicle fleet management
services. It is the sixth largest retail originator of residential mortgages in
the United States and the second largest fleet management services provider in
the United States and Canada. – PHH reports earnings on August 7th AMC
Read Analyst Details Here
America (RAIL - Snapshot Report) - is a Zacks Rank 2 stock with a Q2 earnings ESP of 23%. The Zacks consensus estimate is for Q2 EPS of
$0.57, with the most accurate estimate at $0.70. FreightCar has reported
two strong earnings reports back to back, more than doubling estimates both
times. In Q32011, they did experience a
major miss and reported a 20 cent loss versus Zacks estimates for a 3 cent
momentum is mixed in FreightCar and Avondale partners recently reduced their estimates
for the stock in Q2 to 57 cents. In Q3 as
well FY2012 and 2013, Avondale dropped their
estimates below the Zacks consensus. I
think it’s safe to say that expectations are low. RAIL shares has responded positively to the
last 3 earnings reports.
America, Inc. manufactures railroad freight cars, with particular expertise in
coal-carrying railcars. In addition to coal cars, FreightCar America designs
and builds flat cars, mill gondola cars, intermodal cars, coil steel cars and
motor vehicle carriers. It is headquartered in Chicago, Illinois and has
manufacturing facilities in Danville, Illinois, Roanoke, Virginia and Johnstown,
– FreightCar America reports earnings on August 6th BMO (before
Read Analyst Details Here
this method sounds intriguing to you for improving your portfolios, consider
Whisper Trader service. Not only do
I use Earnings ESP but I also include some other critical factors to create the
“secret sauce” I use to achieve 77.96% accuracy in identifying positive
earnings surprises … before they’re reported.
more about Whisper Trader now.
Senior Equities Strategist, Jared Levy, is the editor of Whisper
Trader and can show you
how to use the power of Zacks Earnings ESP and earnings surprises for timely,