We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Regardless of whether a company is a fledgling or established one, consistent earnings growth interests all. And why not? If the company doesn’t make money, it won’t last over the long haul. Take a company’s revenue over a given period of time, subtract the cost of production and, there it is, you have earnings!
This metric is also considered to be the most significant variable in influencing the share price. Better-than-expected earnings performances normally lead to a rally in the share price. But, expectations of earnings also play a significant role in influencing the price of a stock.
Earnings Estimates & Share Prices
We have often seen a decline in the stock price despite earnings growth and a rally in the price following an earnings decline. This is largely a result of a company’s earnings failing to meet market expectations.
So, what does earnings estimates symbolize? Earnings estimates embody analysts’ opinion of factors such as sales growth, product demand, competitive industry environment, profit margins and cost control. Thus, earnings estimates are a valuable tool for investors. Analysts can also examine the cash flow based on these periodic earnings estimates to determine the fair value of a company.
Here, we have picked stocks that have displayed historical earnings growth and are also seeing a rise in quarterly and annual earnings estimates.
The Winning Strategy
In order to shortlist stocks that have striking earnings growth and positive estimate revisions, we have added the following parameters:
Zacks Rank less than or equal to 2 (Only Zacks' 'Buys' and '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 with a strong EPS growth history).
% Change EPS F(0)/F(-1) greater than or equal to 5 (companies that saw year-over-year earnings growth of 5% or more in the last reported fiscal).
% 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 7,839 stocks to only 7. Here are the top 5 stocks:
Constellation Brands, Inc. (STZ - Free Report) produces, imports, and markets beer, wine, and spirits in the U.S., Canada, Mexico, New Zealand, and Italy. The company’s estimated earnings growth rate for this year is 18.7%. The Zacks Consensus Estimate for its current year earnings increased 0.5% over the last 60 days. Constellation Brands has a Zacks Rank #2 (Buy).
Celanese Corporation (CE - Free Report) , a technology and specialty materials company, manufactures and sells value-added chemicals, thermoplastic polymers, and other chemical-based products worldwide. The company’s estimated earnings growth rate for this year is 9.7%. The Zacks Consensus Estimate for its current year earnings increased 1.1% over the last 60 days. Celanese has a Zacks Rank #1 (Strong Buy).
Facebook, Inc. operates as a mobile application and Website that enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers worldwide. The company’s estimated earnings growth rate for this year is 127.2%. The Zacks Consensus Estimate for its current year earnings increased 7.6% over the last 60 days. Facebook has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Preferred Bank (PFBC - Free Report) provides various commercial banking products and services to small and mid-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals, and high net worth individuals in the U.S. The company’s estimated earnings growth rate for this year is 18.4%. The Zacks Consensus Estimate for its current year earnings rose 2.9% over the last 60 days. Preferred Bank has a Zacks Rank #1.
Worthington Industries, Inc. (WOR - Free Report) , a metals manufacturing company, focuses on value-added steel processing and manufactured metal products in the U.S., Europe, Mexico, Canada, and internationally. The company’s estimated earnings growth rate for this year is 34.4%. The Zacks Consensus Estimate for its current year earnings increased 5.7% over the last 60 days. Worthington Industries has a Zacks Rank #2.
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 »
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
5 Stocks to Buy with Striking Earnings Growth
Regardless of whether a company is a fledgling or established one, consistent earnings growth interests all. And why not? If the company doesn’t make money, it won’t last over the long haul. Take a company’s revenue over a given period of time, subtract the cost of production and, there it is, you have earnings!
This metric is also considered to be the most significant variable in influencing the share price. Better-than-expected earnings performances normally lead to a rally in the share price. But, expectations of earnings also play a significant role in influencing the price of a stock.
Earnings Estimates & Share Prices
We have often seen a decline in the stock price despite earnings growth and a rally in the price following an earnings decline. This is largely a result of a company’s earnings failing to meet market expectations.
So, what does earnings estimates symbolize? Earnings estimates embody analysts’ opinion of factors such as sales growth, product demand, competitive industry environment, profit margins and cost control. Thus, earnings estimates are a valuable tool for investors. Analysts can also examine the cash flow based on these periodic earnings estimates to determine the fair value of a company.
Here, we have picked stocks that have displayed historical earnings growth and are also seeing a rise in quarterly and annual earnings estimates.
The Winning Strategy
In order to shortlist stocks that have striking earnings growth and positive estimate revisions, we have added the following parameters:
Zacks Rank less than or equal to 2 (Only Zacks' 'Buys' and '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 with a strong EPS growth history).
% Change EPS F(0)/F(-1) greater than or equal to 5 (companies that saw year-over-year earnings growth of 5% or more in the last reported fiscal).
% 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 7,839 stocks to only 7. Here are the top 5 stocks:
Constellation Brands, Inc. (STZ - Free Report) produces, imports, and markets beer, wine, and spirits in the U.S., Canada, Mexico, New Zealand, and Italy. The company’s estimated earnings growth rate for this year is 18.7%. The Zacks Consensus Estimate for its current year earnings increased 0.5% over the last 60 days. Constellation Brands has a Zacks Rank #2 (Buy).
Celanese Corporation (CE - Free Report) , a technology and specialty materials company, manufactures and sells value-added chemicals, thermoplastic polymers, and other chemical-based products worldwide. The company’s estimated earnings growth rate for this year is 9.7%. The Zacks Consensus Estimate for its current year earnings increased 1.1% over the last 60 days. Celanese has a Zacks Rank #1 (Strong Buy).
Facebook, Inc. operates as a mobile application and Website that enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers worldwide. The company’s estimated earnings growth rate for this year is 127.2%. The Zacks Consensus Estimate for its current year earnings increased 7.6% over the last 60 days. Facebook has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Preferred Bank (PFBC - Free Report) provides various commercial banking products and services to small and mid-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals, and high net worth individuals in the U.S. The company’s estimated earnings growth rate for this year is 18.4%. The Zacks Consensus Estimate for its current year earnings rose 2.9% over the last 60 days. Preferred Bank has a Zacks Rank #1.
Worthington Industries, Inc. (WOR - Free Report) , a metals manufacturing company, focuses on value-added steel processing and manufactured metal products in the U.S., Europe, Mexico, Canada, and internationally. The company’s estimated earnings growth rate for this year is 34.4%. The Zacks Consensus Estimate for its current year earnings increased 5.7% over the last 60 days. Worthington Industries has a Zacks Rank #2.
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 »