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How to Boost Your Portfolio with Top Medical Stocks Set to Beat Earnings
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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.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
The Zacks Earnings ESP, Explained
The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
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.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.
Should You Consider Humana?
The final step today is to look at a stock that meets our ESP qualifications. Humana (HUM - Free Report) earns a #2 (Buy) seven days from its next quarterly earnings release on April 26, 2023, and its Most Accurate Estimate comes in at $9.37 a share.
By taking the percentage difference between the $9.37 Most Accurate Estimate and the $9.31 Zacks Consensus Estimate, Humana has an Earnings ESP of +0.63%. Investors should also know that HUM 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.
HUM is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Emergent Biosolutions (EBS - Free Report) .
Emergent Biosolutions is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on April 27, 2023. EBS' Most Accurate Estimate sits at -$1.63 a share eight days from its next earnings release.
For Emergent Biosolutions, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$1.67 is +2.59%.
Because both stocks hold a positive Earnings ESP, HUM and EBS 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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How to Boost Your Portfolio with Top Medical Stocks Set to Beat Earnings
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.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
The Zacks Earnings ESP, Explained
The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
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.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.
Should You Consider Humana?
The final step today is to look at a stock that meets our ESP qualifications. Humana (HUM - Free Report) earns a #2 (Buy) seven days from its next quarterly earnings release on April 26, 2023, and its Most Accurate Estimate comes in at $9.37 a share.
By taking the percentage difference between the $9.37 Most Accurate Estimate and the $9.31 Zacks Consensus Estimate, Humana has an Earnings ESP of +0.63%. Investors should also know that HUM 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.
HUM is one of just a large database of Medical stocks with positive ESPs. Another solid-looking stock is Emergent Biosolutions (EBS - Free Report) .
Emergent Biosolutions is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on April 27, 2023. EBS' Most Accurate Estimate sits at -$1.63 a share eight days from its next earnings release.
For Emergent Biosolutions, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$1.67 is +2.59%.
Because both stocks hold a positive Earnings ESP, HUM and EBS 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 >>