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Zacks Earnings ESP: A Better Way to Find Earnings Surprises for Oils and Energy
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Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
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.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
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 HF Sinclair ?
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. HF Sinclair (DINO - Free Report) holds a #1 (Strong Buy) at the moment and its Most Accurate Estimate comes in at $4.25 a share 12 days away from its upcoming earnings release on November 7, 2022.
DINO has an Earnings ESP figure of +1.17%, which, as explained above, is calculated by taking the percentage difference between the $4.25 Most Accurate Estimate and the Zacks Consensus Estimate of $4.20. HF Sinclair 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.
DINO is just one of a large group of Oils and Energy stocks with a positive ESP figure. Murphy Oil (MUR - Free Report) is another qualifying stock you may want to consider.
Murphy Oil, which is readying to report earnings on November 3, 2022, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $1.58 a share, and MUR is eight days out from its next earnings report.
Murphy Oil's Earnings ESP figure currently stands at +0.79% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.56.
Because both stocks hold a positive Earnings ESP, DINO and MUR 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 >>
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Zacks Earnings ESP: A Better Way to Find Earnings Surprises for Oils and Energy
Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.
The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.
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.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
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 HF Sinclair ?
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. HF Sinclair (DINO - Free Report) holds a #1 (Strong Buy) at the moment and its Most Accurate Estimate comes in at $4.25 a share 12 days away from its upcoming earnings release on November 7, 2022.
DINO has an Earnings ESP figure of +1.17%, which, as explained above, is calculated by taking the percentage difference between the $4.25 Most Accurate Estimate and the Zacks Consensus Estimate of $4.20. HF Sinclair 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.
DINO is just one of a large group of Oils and Energy stocks with a positive ESP figure. Murphy Oil (MUR - Free Report) is another qualifying stock you may want to consider.
Murphy Oil, which is readying to report earnings on November 3, 2022, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $1.58 a share, and MUR is eight days out from its next earnings report.
Murphy Oil's Earnings ESP figure currently stands at +0.79% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.56.
Because both stocks hold a positive Earnings ESP, DINO and MUR 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 >>