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Buy These 5 Stocks with Sturdy Earnings Growth Now
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Even if it is a fledgling company or an established corporation, the highest priority will be to secure earnings growth on a year-over-year basis. But, what exactly do earnings represent and why do they draw so much attention? Earnings for a company are arrived at after subtracting the cost of production from revenues over a given period of time. In short, it is the ultimate indicator of profitability.
Upbeat earnings results also have a positive impact on the company’s share price. A better-than-expected earnings performance mostly leads to a jump in the share price. However, in addition to actual earnings, expectations of earnings also play a significant role in influencing the share price.
What are Earnings Estimates?
It’s rarely do we see a company’s stock price declining after reporting earnings growth or for that matter a stock price surging following an earnings decline. This happens because of missing estimates. But what exactly do earnings estimates represent?
Earnings estimates embody analysts’ opinions of factors such as sales growth, product demand, competitive industry environment, profit margins, expenses and cost control. Thus, earnings estimates are a valuable tool for investors when deciding whether or not to buy a stock.
So, it is imperative for an investor zeroing down to buy stocks with solid earnings growth to also make sure that their earnings estimates are on the rise. Earnings estimates also help an analyst to use cash flow analysis to determine the fair value of a firm.
Screening Parameters
In order to shortlist stocks that have striking earnings growth and positive estimate revisions, we added the following parameters:
Zacks Rank equal to 1(Only Zacks' 'Buys' are allowed. With the Zacks Rank proving itself to be one of the best rating systems out there, this is a great way to start things off.)
5-Year Historical EPS Growth (%) greater than X-Industry: Stocks that possess strong EPS growth history.
% Change EPS F(0)/F(-1) greater than or equal to 5: Companies that witnessed year-over-year earnings growth rate of 5% or more in the last reported fiscal year.
% Change Q1 Estimates over the last 4 weeks greater than zero: Stocks that have seen their current quarter earnings estimates revised higher in the last 4 weeks.
% Change F1 Estimates over the last 4 weeks greater than zero: Stocks that have seen their annual earnings estimates revised higher in the last 4 weeks.
The above criteria narrowed down the universe of around 7,737 stocks to only seven. Here are the top five stocks:
The J. M. Smucker Company (SJM - Free Report) manufactures and markets branded food and beverage products worldwide. It operates through U.S. Retail Coffee, U.S. Retail Consumer Foods, U.S. Retail Pet Foods, and International and Foodservice segments. The company’s estimated earnings growth rate for this year is 17.1%.
Isle of Capri Casinos, Inc. develops, owns, and operates branded gaming facilities and related dining, lodging and entertainment facilities in the United States. The company’s estimated earnings growth rate for this year is 13.1%.
Smith & Wesson Holding Corporation manufactures and sells firearm products and accessories. The company operates in two segments, Firearms and Accessories. The company’s estimated earnings growth rate for this year is 2.7%.
First Midwest Bancorp Inc. operates as a bank holding company for First Midwest Bank that provides various banking products and services. The company’s estimated earnings growth rate for this year is 5.5%.
Argo Group International Holdings, Ltd. underwrites specialty insurance and reinsurance products in the property and casualty market worldwide. The company’s estimated earnings growth rate for this year is 10.3%.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »
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Buy These 5 Stocks with Sturdy Earnings Growth Now
Even if it is a fledgling company or an established corporation, the highest priority will be to secure earnings growth on a year-over-year basis. But, what exactly do earnings represent and why do they draw so much attention? Earnings for a company are arrived at after subtracting the cost of production from revenues over a given period of time. In short, it is the ultimate indicator of profitability.
Upbeat earnings results also have a positive impact on the company’s share price. A better-than-expected earnings performance mostly leads to a jump in the share price. However, in addition to actual earnings, expectations of earnings also play a significant role in influencing the share price.
What are Earnings Estimates?
It’s rarely do we see a company’s stock price declining after reporting earnings growth or for that matter a stock price surging following an earnings decline. This happens because of missing estimates. But what exactly do earnings estimates represent?
Earnings estimates embody analysts’ opinions of factors such as sales growth, product demand, competitive industry environment, profit margins, expenses and cost control. Thus, earnings estimates are a valuable tool for investors when deciding whether or not to buy a stock.
So, it is imperative for an investor zeroing down to buy stocks with solid earnings growth to also make sure that their earnings estimates are on the rise. Earnings estimates also help an analyst to use cash flow analysis to determine the fair value of a firm.
Screening Parameters
In order to shortlist stocks that have striking earnings growth and positive estimate revisions, we added the following parameters:
Zacks Rank equal to 1(Only Zacks' 'Buys' are allowed. With the Zacks Rank proving itself to be one of the best rating systems out there, this is a great way to start things off.)
5-Year Historical EPS Growth (%) greater than X-Industry: Stocks that possess strong EPS growth history.
% Change EPS F(0)/F(-1) greater than or equal to 5: Companies that witnessed year-over-year earnings growth rate of 5% or more in the last reported fiscal year.
% Change Q1 Estimates over the last 4 weeks greater than zero: Stocks that have seen their current quarter earnings estimates revised higher in the last 4 weeks.
% Change F1 Estimates over the last 4 weeks greater than zero: Stocks that have seen their annual earnings estimates revised higher in the last 4 weeks.
The above criteria narrowed down the universe of around 7,737 stocks to only seven. Here are the top five stocks:
The J. M. Smucker Company (SJM - Free Report) manufactures and markets branded food and beverage products worldwide. It operates through U.S. Retail Coffee, U.S. Retail Consumer Foods, U.S. Retail Pet Foods, and International and Foodservice segments. The company’s estimated earnings growth rate for this year is 17.1%.
Isle of Capri Casinos, Inc. develops, owns, and operates branded gaming facilities and related dining, lodging and entertainment facilities in the United States. The company’s estimated earnings growth rate for this year is 13.1%.
Smith & Wesson Holding Corporation manufactures and sells firearm products and accessories. The company operates in two segments, Firearms and Accessories. The company’s estimated earnings growth rate for this year is 2.7%.
First Midwest Bancorp Inc. operates as a bank holding company for First Midwest Bank that provides various banking products and services. The company’s estimated earnings growth rate for this year is 5.5%.
Argo Group International Holdings, Ltd. underwrites specialty insurance and reinsurance products in the property and casualty market worldwide. The company’s estimated earnings growth rate for this year is 10.3%.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance
Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »