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How to Boost Your Portfolio with Top Oils and Energy Stocks Set to Beat Earnings

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Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.

We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.

Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.

The Zacks Earnings ESP, Explained

The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.

The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.

Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.

Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.

Should You Consider Occidental Petroleum?

The final step today is to look at a stock that meets our ESP qualifications. Occidental Petroleum (OXY - Free Report) earns a #2 (Buy) four days from its next quarterly earnings release on August 2, 2022, and its Most Accurate Estimate comes in at $2.98 a share.

OXY has an Earnings ESP figure of +1.78%, which, as explained above, is calculated by taking the percentage difference between the $2.98 Most Accurate Estimate and the Zacks Consensus Estimate of $2.93. Occidental Petroleum is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

OXY is one of just a large database of Oils and Energy stocks with positive ESPs. Another solid-looking stock is Suncor Energy (SU - Free Report) .

Suncor Energy, which is readying to report earnings on August 4, 2022, sits at a Zacks Rank #1 (Strong Buy) right now. It's Most Accurate Estimate is currently $1.95 a share, and SU is six days out from its next earnings report.

For Suncor Energy, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.74 is +11.91%.

Because both stocks hold a positive Earnings ESP, OXY and SU could potentially post earnings beats in their next reports.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>


In-Depth Zacks Research for the Tickers Above


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Occidental Petroleum Corporation (OXY) - free report >>

Suncor Energy Inc. (SU) - free report >>

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