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This 1 Oils and Energy Stock Could Beat Earnings: Why It Should Be on Your Radar
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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.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
The Zacks Earnings ESP, Explained
The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more 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.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.
Should You Consider ConocoPhillips?
The final step today is to look at a stock that meets our ESP qualifications. ConocoPhillips (COP - Free Report) earns a #3 (Hold) 23 days from its next quarterly earnings release on November 3, 2022, and its Most Accurate Estimate comes in at $4.77 a share.
By taking the percentage difference between the $4.77 Most Accurate Estimate and the $4.02 Zacks Consensus Estimate, ConocoPhillips has an Earnings ESP of +18.74%. Investors should also know that COP is one of a large group 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.
COP is part of a big group of Oils and Energy stocks that boast a positive ESP, and investors may want to take a look at Halliburton (HAL - Free Report) as well.
Slated to report earnings on October 25, 2022, Halliburton holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.56 a share 14 days from its next quarterly update.
For Halliburton, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.56 is +0.6%.
COP and HAL's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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 >>
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This 1 Oils and Energy Stock Could Beat Earnings: Why It Should Be on Your Radar
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.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
The Zacks Earnings ESP, Explained
The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more 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.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.
Should You Consider ConocoPhillips?
The final step today is to look at a stock that meets our ESP qualifications. ConocoPhillips (COP - Free Report) earns a #3 (Hold) 23 days from its next quarterly earnings release on November 3, 2022, and its Most Accurate Estimate comes in at $4.77 a share.
By taking the percentage difference between the $4.77 Most Accurate Estimate and the $4.02 Zacks Consensus Estimate, ConocoPhillips has an Earnings ESP of +18.74%. Investors should also know that COP is one of a large group 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.
COP is part of a big group of Oils and Energy stocks that boast a positive ESP, and investors may want to take a look at Halliburton (HAL - Free Report) as well.
Slated to report earnings on October 25, 2022, Halliburton holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.56 a share 14 days from its next quarterly update.
For Halliburton, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.56 is +0.6%.
COP and HAL's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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 >>