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When you subtract the cost of production from revenues, you get earnings. In simple terms, it is how much money a company generates. If the company doesn’t make money then it won’t survive over the long haul. This is the reason why the highest priority for both a fledgling and an established corporation is to secure earnings growth on a year-over-year basis.
Earnings growth more often than not leads to an increase in the share price. But, earnings expectations too play a crucial role in share price movements.
Earnings Estimates Impact Share Prices
On several occasions, companies have seen their share prices fall despite generating earnings growth or for that matter a stock price has even surged following an earnings decline. This happens when a company’s earnings fail to meet market expectations.
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.
We have selected stocks that have displayed historical earnings growth and are also seeing a rise in quarterly and annual earnings estimates.
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' 'Strong 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 1 week greater than zero: Stocks that have seen their annual earnings estimates revised higher in the last 1 week.
% 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 7,714 stocks to only 11. Here are the top five stocks:
Omega Protein Corporation develops, produces, and delivers products to enhance the nutritional integrity of foods, dietary supplements, and animal feeds worldwide. The company’s estimated earnings growth rate for this year is 33%.
Central Garden & Pet Company (CENT - Free Report) produces and markets products for the pet, and lawn and garden supplies industries in the United States. The company’s estimated earnings growth rate for this year is 61.7%.
BioTelemetry, Inc. (BEAT - Free Report) provides cardiac monitoring, cardiac monitoring device manufacturing, and centralized cardiac core laboratory services. The company’s estimated earnings growth rate for this year is 59.8%.
Trinseo SA (TSE - Free Report) is a materials company that manufactures and markets synthetic rubber, latex, and plastic products in Europe, the Middle East, North America, Latin America, and the Asia Pacific. The company’s estimated earnings growth rate for this year is 50.8%.
Heritage-Crystal Clean, Inc. provides parts cleaning, and hazardous and non-hazardous waste services to small and mid-sized customers in the manufacturing and vehicle maintenance sectors in North America. The company’s estimated earnings growth rate for this year is 40%.
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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Best 5 Stocks with Sturdy Earnings Growth
When you subtract the cost of production from revenues, you get earnings. In simple terms, it is how much money a company generates. If the company doesn’t make money then it won’t survive over the long haul. This is the reason why the highest priority for both a fledgling and an established corporation is to secure earnings growth on a year-over-year basis.
Earnings growth more often than not leads to an increase in the share price. But, earnings expectations too play a crucial role in share price movements.
Earnings Estimates Impact Share Prices
On several occasions, companies have seen their share prices fall despite generating earnings growth or for that matter a stock price has even surged following an earnings decline. This happens when a company’s earnings fail to meet market expectations.
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.
We have selected stocks that have displayed historical earnings growth and are also seeing a rise in quarterly and annual earnings estimates.
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' 'Strong 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 1 week greater than zero: Stocks that have seen their annual earnings estimates revised higher in the last 1 week.
% 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 7,714 stocks to only 11. Here are the top five stocks:
Omega Protein Corporation develops, produces, and delivers products to enhance the nutritional integrity of foods, dietary supplements, and animal feeds worldwide. The company’s estimated earnings growth rate for this year is 33%.
Central Garden & Pet Company (CENT - Free Report) produces and markets products for the pet, and lawn and garden supplies industries in the United States. The company’s estimated earnings growth rate for this year is 61.7%.
BioTelemetry, Inc. (BEAT - Free Report) provides cardiac monitoring, cardiac monitoring device manufacturing, and centralized cardiac core laboratory services. The company’s estimated earnings growth rate for this year is 59.8%.
Trinseo SA (TSE - Free Report) is a materials company that manufactures and markets synthetic rubber, latex, and plastic products in Europe, the Middle East, North America, Latin America, and the Asia Pacific. The company’s estimated earnings growth rate for this year is 50.8%.
Heritage-Crystal Clean, Inc. provides parts cleaning, and hazardous and non-hazardous waste services to small and mid-sized customers in the manufacturing and vehicle maintenance sectors in North America. The company’s estimated earnings growth rate for this year is 40%.
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 »