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These 2 Transportation Stocks Could Beat Earnings: Why They Should Be on Your Radar
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Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
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, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
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 Ardmore Shipping?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Ardmore Shipping (ASC - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $1.32 a share, just 28 days from its upcoming earnings release on February 21, 2023.
By taking the percentage difference between the $1.32 Most Accurate Estimate and the $1.11 Zacks Consensus Estimate, Ardmore Shipping has an Earnings ESP of +18.92%. Investors should also know that ASC is one of a large group 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.
ASC is part of a big group of Transportation stocks that boast a positive ESP, and investors may want to take a look at Norfolk Southern (NSC - Free Report) as well.
Norfolk Southern, which is readying to report earnings on January 25, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $3.45 a share, and NSC is one day out from its next earnings report.
The Zacks Consensus Estimate for Norfolk Southern is $3.41, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +1.34%.
Because both stocks hold a positive Earnings ESP, ASC and NSC 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 Transportation Stocks Could Beat Earnings: Why They Should Be on Your Radar
Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
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, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
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 Ardmore Shipping?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Ardmore Shipping (ASC - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $1.32 a share, just 28 days from its upcoming earnings release on February 21, 2023.
By taking the percentage difference between the $1.32 Most Accurate Estimate and the $1.11 Zacks Consensus Estimate, Ardmore Shipping has an Earnings ESP of +18.92%. Investors should also know that ASC is one of a large group 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.
ASC is part of a big group of Transportation stocks that boast a positive ESP, and investors may want to take a look at Norfolk Southern (NSC - Free Report) as well.
Norfolk Southern, which is readying to report earnings on January 25, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $3.45 a share, and NSC is one day out from its next earnings report.
The Zacks Consensus Estimate for Norfolk Southern is $3.41, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +1.34%.
Because both stocks hold a positive Earnings ESP, ASC and NSC 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 >>