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Why Investors Need to Take Advantage of These 2 Consumer Staples Stocks Now
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Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
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.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
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.
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 Post Holdings?
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. Post Holdings (POST - Free Report) earns a #1 (Strong Buy) right now and its Most Accurate Estimate sits at $0.70 a share, just 13 days from its upcoming earnings release on May 4, 2023.
POST has an Earnings ESP figure of +2.94%, which, as explained above, is calculated by taking the percentage difference between the $0.70 Most Accurate Estimate and the Zacks Consensus Estimate of $0.68. Post Holdings is one of a large database 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.
POST is just one of a large group of Consumer Staples stocks with a positive ESP figure. Estee Lauder (EL - Free Report) is another qualifying stock you may want to consider.
Estee Lauder is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on May 3, 2023. EL's Most Accurate Estimate sits at $0.53 a share 12 days from its next earnings release.
For Estee Lauder, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.48 is +9.54%.
Because both stocks hold a positive Earnings ESP, POST and EL 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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Why Investors Need to Take Advantage of These 2 Consumer Staples Stocks Now
Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
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.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
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.
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 Post Holdings?
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. Post Holdings (POST - Free Report) earns a #1 (Strong Buy) right now and its Most Accurate Estimate sits at $0.70 a share, just 13 days from its upcoming earnings release on May 4, 2023.
POST has an Earnings ESP figure of +2.94%, which, as explained above, is calculated by taking the percentage difference between the $0.70 Most Accurate Estimate and the Zacks Consensus Estimate of $0.68. Post Holdings is one of a large database 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.
POST is just one of a large group of Consumer Staples stocks with a positive ESP figure. Estee Lauder (EL - Free Report) is another qualifying stock you may want to consider.
Estee Lauder is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on May 3, 2023. EL's Most Accurate Estimate sits at $0.53 a share 12 days from its next earnings release.
For Estee Lauder, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.48 is +9.54%.
Because both stocks hold a positive Earnings ESP, POST and EL 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 >>