Stock Screening Education
Screening for Earnings Estimates Revisions
Earnings estimate revisions are at the heart of the Zacks trading/investment philosophy, stating that stocks that have recently had their estimates revised upward by analysts tend to outperform the market over the next 9-12 months.
Earnings estimates are one of the most important and popular data metrics used in order to evaluate the fundamental strength of a company. Estimates are created by stock market analysts in order to project the profitability of a company over a certain period of time, usually on a quarterly and/or yearly basis. Rising estimates are a positive indication while slumping estimates are considered negative.
How To Use
The Zacks Custom Screener, a totally free screening tool, enables the user to screen for companies that have recently had their earnings estimates revised upward by the analyst community. By searching for these companies, investors can align themselves with stocks that are best positioned to out-perform the market and produce exceptional portfolio results.
Improving Your Screening Results
If an investor is interested in refining their approach to screening with earnings estimates, and digging even deeper into this data set, the Zacks Research Wizard contains capabilities that extend beyond the functionality of the Custom Screener. As you can see from the screen-shot below, the Research Wizard contains numerous categories for analyzing trends in earnings estimates, enabling the investor to cull additional insight about any respective stock.
You can use these tools to find stocks that have rising estimates, or stocks with falling estimates, but either way, an investor improves their chance of finding stocks to boost the bottom line.