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How to Boost Your Portfolio with Top Industrial Products 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.
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 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.
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.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 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 Applied Industrial Technologies?
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. Applied Industrial Technologies (AIT - Free Report) earns a #1 (Strong Buy) right now and its Most Accurate Estimate sits at $2.41 a share, just 15 days from its upcoming earnings release on April 25, 2024.
AIT has an Earnings ESP figure of +0.63%, which, as explained above, is calculated by taking the percentage difference between the $2.41 Most Accurate Estimate and the Zacks Consensus Estimate of $2.40. Applied Industrial Technologies 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.
AIT is part of a big group of Industrial Products stocks that boast a positive ESP, and investors may want to take a look at Atmus Filtration Technologies (ATMU - Free Report) as well.
Atmus Filtration Technologies is a Zacks Rank #1 (Strong Buy) stock, and is getting ready to report earnings on May 8, 2024. ATMU's Most Accurate Estimate sits at $0.58 a share 28 days from its next earnings release.
Atmus Filtration Technologies' Earnings ESP figure currently stands at +0.29% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.57.
AIT and ATMU's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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 Industrial Products 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.
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 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.
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.
Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 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 Applied Industrial Technologies?
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. Applied Industrial Technologies (AIT - Free Report) earns a #1 (Strong Buy) right now and its Most Accurate Estimate sits at $2.41 a share, just 15 days from its upcoming earnings release on April 25, 2024.
AIT has an Earnings ESP figure of +0.63%, which, as explained above, is calculated by taking the percentage difference between the $2.41 Most Accurate Estimate and the Zacks Consensus Estimate of $2.40. Applied Industrial Technologies 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.
AIT is part of a big group of Industrial Products stocks that boast a positive ESP, and investors may want to take a look at Atmus Filtration Technologies (ATMU - Free Report) as well.
Atmus Filtration Technologies is a Zacks Rank #1 (Strong Buy) stock, and is getting ready to report earnings on May 8, 2024. ATMU's Most Accurate Estimate sits at $0.58 a share 28 days from its next earnings release.
Atmus Filtration Technologies' Earnings ESP figure currently stands at +0.29% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.57.
AIT and ATMU's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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 >>