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The third-quarter earnings season is around the corner, considered a crucial one after the lackluster second-quarter performance by several companies. The overall economic growth prospects remain uncertain as the U.S. economy continues to be volatile. In the month of August, inflation, consumer prices and personal income rose almost as expected, while consumer spending declined for the first time in the past seven months. The Fed Reserve continues to keep rates low and the possibility of a rate hike remains uncertain.
Considering the varied factors which might affect third-quarter results, we have zeroed in on a few stocks based on their performance in the last quarter. Each of these stocks have been picked using our stock screener and have a Zacks Rank #1 (Strong Buy) or 2 (Buy), an earnings beat of over 5% in the prior quarter, and a positive Earnings ESP.
A company has a positive Earnings ESP when the Most Accurate Estimate is above the Zacks Consensus Estimate. The combination of a Zacks Rank #3 or better and a positive ESP increases the likelihood of an earnings beat in the upcoming earnings season.
Given the bottom-line outperformance in the last quarter and the likelihood to repeat the same this earnings season, these stocks can be considered by investors. An earnings beat generally leads to significant stock price appreciation.
Crown Castle International Corp. (CCI - Free Report) , headquartered in Houston, TX, is a real estate investment trust with primary operations in the U.S. and Australia. Last quarter, the company beat the Zacks consensus Estimate by 5.45%. The company has outpaced estimates in three of the last four quarters with an average surprise of 3.93%. Crown Castle sports a Zacks Rank #1 and has an Earnings ESP of +0.89%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Packaging Corporation of America (PKG - Free Report) , based in lake Forest, IL, is a leading manufacturer of containerboards and white paper in North America. The company beat the Zacks consensus Estimate by 5.93% in the last quarter. It has also posted an earnings surprise in three of the last four quarters with an average beat of 4.59%. The company currently has a Zacks Rank #1.
Additionally, it has a PE ratio of 16.80, which is lower that the industry PE of 19.50. The company also has a Earnings ESP of +1.53%.
San Jose, CA-based Xilinx, Inc. provides complete programmable logic solutions. The Zacks Rank #2 company has an Earnings ESP of +1.85%. Xilinx posted an earnings surprise of 10.91% in the last quarter. Moreover, the company has posted an earnings surprise in each of the last four quarters with an average beat of 4.78%.
The Bank of Nova Scotia (BNS - Free Report) headquartered in Toronto, Canada in a multi-national entity and a prominent bank in both North America and Canada. It offers a wide range of services like personal, commercial, corporate and investment banking. Bank of Nova Scotia posted an earnings surprise of 5.26% in the last quarter. In fact, the company has posted an earnings surprise in each of the last four quarters with an average beat of 3.19%. This Zacks Ranks #1, company also has an Earnings ESP of +3.39%.
KKR and Co. LP (KKR - Free Report) is an investment firm based in New York City, NY. It is a leading name in the private equity segment with global operations. The company carries a Zacks Rank #2 and has an Earnings ESP of +39.22%. KKR beat estimates by over 100% in the last quarter.
Headquartered in San Jose, CA, Oclaro Inc. , provides a wide range of products to the telecommunications industry like high performance optical components, modules and subsystems. The company sports a Zacks Rank #1. It beat the Zacks consensus Estimate by 80% in the last quarter and has beaten earnings in each of the last four quarters with an average earnings surprise of over 100%. The company also has an Earnings ESP of +10%.
Netapp Inc. (NTAP - Free Report) , which is based in Sunnyvale, CA, provides storage and data management services and has operations across the globe. The company sports a Zacks Rank #1. Netapp outpaced the Zacks consensus Estimate by 55.56% in the last quarter. Moreover, the company managed to beat estimates in three of the last four quarters with an average beat of 14.52%. The company also has an Earnings ESP of +5.26%.
Confidential: Zacks' Best Investment Ideas
Would you like to see a hand-picked "all-star" selection of investment ideas from the man who heads up Zacks' trading and investing services? Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand.
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7 Stocks to Watch for Gains This Earnings Season
The third-quarter earnings season is around the corner, considered a crucial one after the lackluster second-quarter performance by several companies. The overall economic growth prospects remain uncertain as the U.S. economy continues to be volatile. In the month of August, inflation, consumer prices and personal income rose almost as expected, while consumer spending declined for the first time in the past seven months. The Fed Reserve continues to keep rates low and the possibility of a rate hike remains uncertain.
Considering the varied factors which might affect third-quarter results, we have zeroed in on a few stocks based on their performance in the last quarter. Each of these stocks have been picked using our stock screener and have a Zacks Rank #1 (Strong Buy) or 2 (Buy), an earnings beat of over 5% in the prior quarter, and a positive Earnings ESP.
A company has a positive Earnings ESP when the Most Accurate Estimate is above the Zacks Consensus Estimate. The combination of a Zacks Rank #3 or better and a positive ESP increases the likelihood of an earnings beat in the upcoming earnings season.
Given the bottom-line outperformance in the last quarter and the likelihood to repeat the same this earnings season, these stocks can be considered by investors. An earnings beat generally leads to significant stock price appreciation.
Crown Castle International Corp. (CCI - Free Report) , headquartered in Houston, TX, is a real estate investment trust with primary operations in the U.S. and Australia. Last quarter, the company beat the Zacks consensus Estimate by 5.45%. The company has outpaced estimates in three of the last four quarters with an average surprise of 3.93%. Crown Castle sports a Zacks Rank #1 and has an Earnings ESP of +0.89%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Packaging Corporation of America (PKG - Free Report) , based in lake Forest, IL, is a leading manufacturer of containerboards and white paper in North America. The company beat the Zacks consensus Estimate by 5.93% in the last quarter. It has also posted an earnings surprise in three of the last four quarters with an average beat of 4.59%. The company currently has a Zacks Rank #1.
Additionally, it has a PE ratio of 16.80, which is lower that the industry PE of 19.50. The company also has a Earnings ESP of +1.53%.
San Jose, CA-based Xilinx, Inc. provides complete programmable logic solutions. The Zacks Rank #2 company has an Earnings ESP of +1.85%. Xilinx posted an earnings surprise of 10.91% in the last quarter. Moreover, the company has posted an earnings surprise in each of the last four quarters with an average beat of 4.78%.
The Bank of Nova Scotia (BNS - Free Report) headquartered in Toronto, Canada in a multi-national entity and a prominent bank in both North America and Canada. It offers a wide range of services like personal, commercial, corporate and investment banking. Bank of Nova Scotia posted an earnings surprise of 5.26% in the last quarter. In fact, the company has posted an earnings surprise in each of the last four quarters with an average beat of 3.19%. This Zacks Ranks #1, company also has an Earnings ESP of +3.39%.
KKR and Co. LP (KKR - Free Report) is an investment firm based in New York City, NY. It is a leading name in the private equity segment with global operations. The company carries a Zacks Rank #2 and has an Earnings ESP of +39.22%. KKR beat estimates by over 100% in the last quarter.
Headquartered in San Jose, CA, Oclaro Inc. , provides a wide range of products to the telecommunications industry like high performance optical components, modules and subsystems. The company sports a Zacks Rank #1. It beat the Zacks consensus Estimate by 80% in the last quarter and has beaten earnings in each of the last four quarters with an average earnings surprise of over 100%. The company also has an Earnings ESP of +10%.
Netapp Inc. (NTAP - Free Report) , which is based in Sunnyvale, CA, provides storage and data management services and has operations across the globe. The company sports a Zacks Rank #1. Netapp outpaced the Zacks consensus Estimate by 55.56% in the last quarter. Moreover, the company managed to beat estimates in three of the last four quarters with an average beat of 14.52%. The company also has an Earnings ESP of +5.26%.
Confidential: Zacks' Best Investment Ideas
Would you like to see a hand-picked "all-star" selection of investment ideas from the man who heads up Zacks' trading and investing services? Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand.
Click for his selected trades right now >>