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This 'Strong Buy' Gaming Stock is Poised for Explosive Gains
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The price action in the stock market this year has illustrated how important it is to remain disciplined and follow a rule-based strategy. As nearly every Wall Street analyst was calling for lower stock prices to kick off the New Year (along with an impending recession), it paid to ignore the noise and listen to what the market and individual stocks were telling us.
A strategy that is mainly mechanical can free investors from emotional decision-making. Emotions can prevent investors from making sound decisions and are one of our biggest threats to achieving an considerable rate of return on our investments.
Rules-based strategies remove the reliance of making decisions based on predictions or guesswork. Investing using a clear set of rules allows investors to follow a disciplined approach. And here at Zacks, we provide our subscribers with a rule-based strategy that has consistently outperformed the market year after year.
How to Predict Explosive Gains
At the heart of this strategy is the Zacks Rank, which analyzes earnings estimate revisions. These earnings revisions have been shown to be the most powerful force impacting stock prices. Stocks with rising estimates have significantly outperformed the S&P 500. In fact, based on a recent 34-year study, a portfolio of Zacks Rank #1 (Strong Buy) stocks beat the market with an average annual return of over 25% per year – more than double that of the S&P’s 11.1%.
That’s why it is so crucial to keep an eye on which stocks are ranked favorably by the Zacks Rank system. Let’s take a look at a current example in today’s investment climate.
A Zacks ‘Strong Buy’ and Consistent Outperformer
Inspired Entertainment (INSE - Free Report) is a business-to-business gaming technology company that supplies a content platform to regulated lottery, betting, and gaming operators globally. INSE provides gaming terminals and software, ultra HD sports games, random number generated casino content, and amusement machines. The company serves betting offices, casinos, gaming halls, sports and entertainment centers, and adult gaming centers.
INSE is part of the Zacks Technology Services industry group, which is currently ranked in the top 41% out of approximately 250 industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months.
Quantitative research studies have shown that approximately half of a stock’s future price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. By focusing on the top stocks within leading industry groups, we can dramatically improve our odds of success.
A History of Earnings Beats and Improving Forecasts
Inspired Entertainment has exceeded earnings estimates in three of the past four quarters, with an average earnings surprise of 19.02%. The gaming tech company most recently reported Q3 earnings back in November of $0.35 per share, a 12.9% surprise over the $0.31 estimate. Shares have risen over 20% to kick off the year.
Image Source: Zacks Investment Research
Analysts covering INSE have upped their 2023 EPS estimates by 12.15% over the past 60 days. The Zacks Consensus Estimate now stands at $1.20/share, reflecting potential growth of 31.1% versus last year.
Image Source: Zacks Investment Research
What the Zacks Model Unveils
The Zacks Earnings ESP (Expected Surprise Prediction) seeks to find companies that have recently seen positive earnings estimate revision activity. The idea is that this recent information can serve as a more accurate predictor of the future, which can give investors a leg up during earnings season.
The technique has proven to be quite useful in finding positive surprises. In fact, when combining a Zacks Rank #3 or better with a positive Earnings ESP, stocks delivered a positive surprise 70% of the time according to our 10-year backtest.
INSE is a Zacks Rank #1 (Strong Buy) and boasts a +17.72% Earnings ESP. Another beat may be in the cards when the company reports its Q4 results on March 10th.
Keep an eye on Inspired Entertainment as the stock continues to outperform the market.
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This 'Strong Buy' Gaming Stock is Poised for Explosive Gains
The price action in the stock market this year has illustrated how important it is to remain disciplined and follow a rule-based strategy. As nearly every Wall Street analyst was calling for lower stock prices to kick off the New Year (along with an impending recession), it paid to ignore the noise and listen to what the market and individual stocks were telling us.
A strategy that is mainly mechanical can free investors from emotional decision-making. Emotions can prevent investors from making sound decisions and are one of our biggest threats to achieving an considerable rate of return on our investments.
Rules-based strategies remove the reliance of making decisions based on predictions or guesswork. Investing using a clear set of rules allows investors to follow a disciplined approach. And here at Zacks, we provide our subscribers with a rule-based strategy that has consistently outperformed the market year after year.
How to Predict Explosive Gains
At the heart of this strategy is the Zacks Rank, which analyzes earnings estimate revisions. These earnings revisions have been shown to be the most powerful force impacting stock prices. Stocks with rising estimates have significantly outperformed the S&P 500. In fact, based on a recent 34-year study, a portfolio of Zacks Rank #1 (Strong Buy) stocks beat the market with an average annual return of over 25% per year – more than double that of the S&P’s 11.1%.
That’s why it is so crucial to keep an eye on which stocks are ranked favorably by the Zacks Rank system. Let’s take a look at a current example in today’s investment climate.
A Zacks ‘Strong Buy’ and Consistent Outperformer
Inspired Entertainment (INSE - Free Report) is a business-to-business gaming technology company that supplies a content platform to regulated lottery, betting, and gaming operators globally. INSE provides gaming terminals and software, ultra HD sports games, random number generated casino content, and amusement machines. The company serves betting offices, casinos, gaming halls, sports and entertainment centers, and adult gaming centers.
INSE is part of the Zacks Technology Services industry group, which is currently ranked in the top 41% out of approximately 250 industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months.
Quantitative research studies have shown that approximately half of a stock’s future price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. By focusing on the top stocks within leading industry groups, we can dramatically improve our odds of success.
A History of Earnings Beats and Improving Forecasts
Inspired Entertainment has exceeded earnings estimates in three of the past four quarters, with an average earnings surprise of 19.02%. The gaming tech company most recently reported Q3 earnings back in November of $0.35 per share, a 12.9% surprise over the $0.31 estimate. Shares have risen over 20% to kick off the year.
Image Source: Zacks Investment Research
Analysts covering INSE have upped their 2023 EPS estimates by 12.15% over the past 60 days. The Zacks Consensus Estimate now stands at $1.20/share, reflecting potential growth of 31.1% versus last year.
Image Source: Zacks Investment Research
What the Zacks Model Unveils
The Zacks Earnings ESP (Expected Surprise Prediction) seeks to find companies that have recently seen positive earnings estimate revision activity. The idea is that this recent information can serve as a more accurate predictor of the future, which can give investors a leg up during earnings season.
The technique has proven to be quite useful in finding positive surprises. In fact, when combining a Zacks Rank #3 or better with a positive Earnings ESP, stocks delivered a positive surprise 70% of the time according to our 10-year backtest.
INSE is a Zacks Rank #1 (Strong Buy) and boasts a +17.72% Earnings ESP. Another beat may be in the cards when the company reports its Q4 results on March 10th.
Keep an eye on Inspired Entertainment as the stock continues to outperform the market.