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Want Better Returns? Don?t Ignore These 2 Medical Stocks Set to Beat Earnings
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Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
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, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
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 #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, 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 Sorrento Therapeutics?
The final step today is to look at a stock that meets our ESP qualifications. Sorrento Therapeutics (SRNE - Free Report) earns a #3 (Hold) six days from its next quarterly earnings release on February 28, 2023, and its Most Accurate Estimate comes in at -$0.15 a share.
By taking the percentage difference between the -$0.15 Most Accurate Estimate and the -$0.19 Zacks Consensus Estimate, Sorrento Therapeutics has an Earnings ESP of +21.05%. Investors should also know that SRNE 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.
SRNE is just one of a large group of Medical stocks with a positive ESP figure. Sanofi (SNY - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on April 27, 2023, Sanofi holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.12 a share 64 days from its next quarterly update.
For Sanofi, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.10 is +2.58%.
Because both stocks hold a positive Earnings ESP, SRNE and SNY 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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Want Better Returns? Don?t Ignore These 2 Medical Stocks Set to Beat Earnings
Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
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, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
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 #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, 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 Sorrento Therapeutics?
The final step today is to look at a stock that meets our ESP qualifications. Sorrento Therapeutics (SRNE - Free Report) earns a #3 (Hold) six days from its next quarterly earnings release on February 28, 2023, and its Most Accurate Estimate comes in at -$0.15 a share.
By taking the percentage difference between the -$0.15 Most Accurate Estimate and the -$0.19 Zacks Consensus Estimate, Sorrento Therapeutics has an Earnings ESP of +21.05%. Investors should also know that SRNE 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.
SRNE is just one of a large group of Medical stocks with a positive ESP figure. Sanofi (SNY - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on April 27, 2023, Sanofi holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.12 a share 64 days from its next quarterly update.
For Sanofi, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.10 is +2.58%.
Because both stocks hold a positive Earnings ESP, SRNE and SNY 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 >>