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Why Investors Need to Take Advantage of These 2 Industrial Products 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.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
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 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 #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, 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 Terex?
The final step today is to look at a stock that meets our ESP qualifications. Terex (TEX - Free Report) earns a #3 (Hold) 22 days from its next quarterly earnings release on October 26, 2023, and its Most Accurate Estimate comes in at $1.73 a share.
TEX has an Earnings ESP figure of +4.88%, which, as explained above, is calculated by taking the percentage difference between the $1.73 Most Accurate Estimate and the Zacks Consensus Estimate of $1.65. Terex 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.
TEX is part of a big group of Industrial Products stocks that boast a positive ESP, and investors may want to take a look at Vertex Energy (VTNR - Free Report) as well.
Vertex Energy is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on November 14, 2023. VTNR's Most Accurate Estimate sits at $0.28 a share 41 days from its next earnings release.
The Zacks Consensus Estimate for Vertex Energy is -$0.04, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +877.78%.
Because both stocks hold a positive Earnings ESP, TEX and VTNR 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 Industrial Products 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.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
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 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 #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, 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 Terex?
The final step today is to look at a stock that meets our ESP qualifications. Terex (TEX - Free Report) earns a #3 (Hold) 22 days from its next quarterly earnings release on October 26, 2023, and its Most Accurate Estimate comes in at $1.73 a share.
TEX has an Earnings ESP figure of +4.88%, which, as explained above, is calculated by taking the percentage difference between the $1.73 Most Accurate Estimate and the Zacks Consensus Estimate of $1.65. Terex 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.
TEX is part of a big group of Industrial Products stocks that boast a positive ESP, and investors may want to take a look at Vertex Energy (VTNR - Free Report) as well.
Vertex Energy is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on November 14, 2023. VTNR's Most Accurate Estimate sits at $0.28 a share 41 days from its next earnings release.
The Zacks Consensus Estimate for Vertex Energy is -$0.04, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +877.78%.
Because both stocks hold a positive Earnings ESP, TEX and VTNR 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 >>