It is earnings season again!
While this season brings the potential for big moves, investors are presented with a very interesting situation thanks to recent market performance, and the key events on the horizon.
Most stocks are approaching fresh highs, and have rebounded nicely in the past few months. The economy is looking strong to start the year, and confidence is generally pretty high among investors. Generally, this bodes well for stocks, but the new administration, which is coming in less than two weeks, could introduce some volatility into the situation, as we learn what the policy goals and priorities will be.
In this type of uncertain environment, where investors aren't sure how politics are going to play a role in an otherwise solid economic situation, it is a great idea to focus on the best positioned companies to find the winners this earnings season. One way to uncover them ahead of time is with our proprietary system called 'Earnings ESP' (Expected Surprise Prediction), which can assist you in uncovering these huge winners before they report earnings.
So if you want to increase your odds of success this earnings season -- and who wouldn't given the uncertain backdrop? -- then this is one metric you need to know.
More . . .
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Advance Notice of Earnings Surprises
What if you were tipped off to handpicked stocks that will exceed earnings expectations? What if you could buy them BEFORE their reports are released?
A research breakthrough from Zacks predicts positive earnings surprises with previously unthinkable 83.25% reliability. Now you can get in early on these "surprises" before other investors swarm in to drive up the prices. Alert: Access closes this Sunday, January 15.
See Surprise Stocks Now >>
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The Crystal Ball of Earnings Season
While it is impossible to know with complete certainty which stocks will deliver positive surprises this earnings season and which ones will disappoint, our proprietary Earnings ESP system determines which stocks have the best chance to surprise with their next earnings announcement. This method predicts earnings surprises with more than 83% accuracy.
The Earnings ESP is simply the percentage difference between the 'Most Accurate Estimate' and the 'Zacks Consensus Estimate' for a company's upcoming earnings per share number:
Earnings ESP = (Most Accurate Estimate / Zacks Consensus Estimate) -1
The most accurate estimate is the consensus of earnings estimates from analysts over the last 30 days. The Zacks Consensus Estimate, on the other hand, takes the consensus of all analysts' estimates for the quarter, even if that estimate hasn't been revised in three months.
The underlying concept here is that the most recent analyst estimate revisions are usually the most accurate. Think about it -- if an analyst revises his earnings estimate right before an earnings release, he is likely using fresh information that will lead to a more accurate estimate than what analysts predicted two or three months ago.
Just like with a weather forecast that is more accurate for tomorrow than when trying to predict the weather three months from now, the more accurate estimates will usually be the ones that have all the most recent information at their disposal.
For example, let’s say specialty retailer XYZ Corp reports earnings next week. The Zacks Consensus Estimate for the coming quarter is comprised of eight analysts' estimates and is $0.75. However, three analysts have increased their earnings estimates for XYZ Corp within the last 30 days.
Perhaps these analysts have recently visited stores and measured traffic, spoken with suppliers, surveyed customers or incorporated recent economic data into their earnings models. The consensus among these recent estimates is $0.78. That would give XYZ Corp an Earnings ESP of 4% ($0.78/$0.75). This company is likely to deliver a positive earnings surprise.
While not all companies that deliver positive earnings surprises will see their stock price rise, studies show that, on average, companies that deliver solid beats see excess returns in their share price for several weeks following the report. This is known as the post-earnings-announcement drift. And finding these stocks before they beat, and then holding them in this 'drift' period, can really boost your returns.
Despite several headwinds facing the market, there are bound to be plenty of large positive surprises this quarter. Utilizing Zacks' Earnings ESP system can greatly increase your odds of finding these big winners before they report.
How Can the Earnings ESP Work for You?
Earnings ESP is a good place to start your stock search. The problem is that in each earnings season, including this one, there are hundreds of stocks with positive ESPs.
That is why our Zacks research team created a special strategy that uses additional filters to narrow down the lists and detect rare companies that are most likely to both beat earnings and experience nice gains during the post-earnings-announcement drift. This is what drives the portfolio I am managing called the Surprise Trader.
I can't share all the details of its formula with you, but I can tell you that it relies on two little-known criteria coming from the brokerage analyst community. These two factors are then layered on top of other time-tested elements such as the Zacks Rank and Zacks Industry Rank to find only the best stocks in the best industries.
This is a significant research breakthrough, and it predicts positive earnings surprises before they are reported, with once-impossible precision.
If you would like to find out in advance which stocks are most likely to be winners this earnings season -- and position yourself for strong potential profits, then I invite you to join us.
But don't delay. We can't let too many share these recommendations. The portfolio is generally closed to the public. Today it is briefly open again, but your chance for access ends on midnight Sunday January 15.
Look into the Zacks Surprise Trader now >>
Good investing,
Eric
Eric Dutram is Zacks' Earnings Surprise Strategist and manages the Surprise Trader portfolio.
Image: Bigstock
How to Find Big Winners to Start 2017
It is earnings season again!
While this season brings the potential for big moves, investors are presented with a very interesting situation thanks to recent market performance, and the key events on the horizon.
Most stocks are approaching fresh highs, and have rebounded nicely in the past few months. The economy is looking strong to start the year, and confidence is generally pretty high among investors. Generally, this bodes well for stocks, but the new administration, which is coming in less than two weeks, could introduce some volatility into the situation, as we learn what the policy goals and priorities will be.
In this type of uncertain environment, where investors aren't sure how politics are going to play a role in an otherwise solid economic situation, it is a great idea to focus on the best positioned companies to find the winners this earnings season. One way to uncover them ahead of time is with our proprietary system called 'Earnings ESP' (Expected Surprise Prediction), which can assist you in uncovering these huge winners before they report earnings.
So if you want to increase your odds of success this earnings season -- and who wouldn't given the uncertain backdrop? -- then this is one metric you need to know.
More . . .
------------------------------------------------------------------------------------------------------
Advance Notice of Earnings Surprises
What if you were tipped off to handpicked stocks that will exceed earnings expectations? What if you could buy them BEFORE their reports are released?
A research breakthrough from Zacks predicts positive earnings surprises with previously unthinkable 83.25% reliability. Now you can get in early on these "surprises" before other investors swarm in to drive up the prices. Alert: Access closes this Sunday, January 15.
See Surprise Stocks Now >>
------------------------------------------------------------------------------------------------------
The Crystal Ball of Earnings Season
While it is impossible to know with complete certainty which stocks will deliver positive surprises this earnings season and which ones will disappoint, our proprietary Earnings ESP system determines which stocks have the best chance to surprise with their next earnings announcement. This method predicts earnings surprises with more than 83% accuracy.
The Earnings ESP is simply the percentage difference between the 'Most Accurate Estimate' and the 'Zacks Consensus Estimate' for a company's upcoming earnings per share number:
Earnings ESP = (Most Accurate Estimate / Zacks Consensus Estimate) -1
The most accurate estimate is the consensus of earnings estimates from analysts over the last 30 days. The Zacks Consensus Estimate, on the other hand, takes the consensus of all analysts' estimates for the quarter, even if that estimate hasn't been revised in three months.
The underlying concept here is that the most recent analyst estimate revisions are usually the most accurate. Think about it -- if an analyst revises his earnings estimate right before an earnings release, he is likely using fresh information that will lead to a more accurate estimate than what analysts predicted two or three months ago.
Just like with a weather forecast that is more accurate for tomorrow than when trying to predict the weather three months from now, the more accurate estimates will usually be the ones that have all the most recent information at their disposal.
For example, let’s say specialty retailer XYZ Corp reports earnings next week. The Zacks Consensus Estimate for the coming quarter is comprised of eight analysts' estimates and is $0.75. However, three analysts have increased their earnings estimates for XYZ Corp within the last 30 days.
Perhaps these analysts have recently visited stores and measured traffic, spoken with suppliers, surveyed customers or incorporated recent economic data into their earnings models. The consensus among these recent estimates is $0.78. That would give XYZ Corp an Earnings ESP of 4% ($0.78/$0.75). This company is likely to deliver a positive earnings surprise.
While not all companies that deliver positive earnings surprises will see their stock price rise, studies show that, on average, companies that deliver solid beats see excess returns in their share price for several weeks following the report. This is known as the post-earnings-announcement drift. And finding these stocks before they beat, and then holding them in this 'drift' period, can really boost your returns.
Despite several headwinds facing the market, there are bound to be plenty of large positive surprises this quarter. Utilizing Zacks' Earnings ESP system can greatly increase your odds of finding these big winners before they report.
How Can the Earnings ESP Work for You?
Earnings ESP is a good place to start your stock search. The problem is that in each earnings season, including this one, there are hundreds of stocks with positive ESPs.
That is why our Zacks research team created a special strategy that uses additional filters to narrow down the lists and detect rare companies that are most likely to both beat earnings and experience nice gains during the post-earnings-announcement drift. This is what drives the portfolio I am managing called the Surprise Trader.
I can't share all the details of its formula with you, but I can tell you that it relies on two little-known criteria coming from the brokerage analyst community. These two factors are then layered on top of other time-tested elements such as the Zacks Rank and Zacks Industry Rank to find only the best stocks in the best industries.
This is a significant research breakthrough, and it predicts positive earnings surprises before they are reported, with once-impossible precision.
If you would like to find out in advance which stocks are most likely to be winners this earnings season -- and position yourself for strong potential profits, then I invite you to join us.
But don't delay. We can't let too many share these recommendations. The portfolio is generally closed to the public. Today it is briefly open again, but your chance for access ends on midnight Sunday January 15.
Look into the Zacks Surprise Trader now >>
Good investing,
Eric
Eric Dutram is Zacks' Earnings Surprise Strategist and manages the Surprise Trader portfolio.