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How to Boost Your Portfolio with Top Retail and Wholesale 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.
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.
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 Kroger?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Kroger (KR - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $0.90 a share, just two days from its upcoming earnings release on March 2, 2023.
Kroger's Earnings ESP sits at +0.96%, which, as explained above, is calculated by taking the percentage difference between the $0.90 Most Accurate Estimate and the Zacks Consensus Estimate of $0.89. KR is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
KR is just one of a large group of Retail and Wholesale stocks with a positive ESP figure. Expedia (EXPE - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on May 1, 2023, Expedia holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.05 a share 62 days from its next quarterly update.
Expedia's Earnings ESP figure currently stands at +163.49% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.08.
KR and EXPE'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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How to Boost Your Portfolio with Top Retail and Wholesale Stocks Set to Beat Earnings
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.
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.
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 Kroger?
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Kroger (KR - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $0.90 a share, just two days from its upcoming earnings release on March 2, 2023.
Kroger's Earnings ESP sits at +0.96%, which, as explained above, is calculated by taking the percentage difference between the $0.90 Most Accurate Estimate and the Zacks Consensus Estimate of $0.89. KR is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
KR is just one of a large group of Retail and Wholesale stocks with a positive ESP figure. Expedia (EXPE - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on May 1, 2023, Expedia holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.05 a share 62 days from its next quarterly update.
Expedia's Earnings ESP figure currently stands at +163.49% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.08.
KR and EXPE'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 >>