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Why Investors Need to Take Advantage of These 2 Retail and Wholesale Stocks Now
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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.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
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 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.
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 Walgreens Boots Alliance?
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. Walgreens Boots Alliance (WBA - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $1.15 a share, just 30 days from its upcoming earnings release on March 30, 2023.
Walgreens Boots Alliance's Earnings ESP sits at +3.6%, which, as explained above, is calculated by taking the percentage difference between the $1.15 Most Accurate Estimate and the Zacks Consensus Estimate of $1.11. WBA 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.
WBA is part of a big group of Retail and Wholesale stocks that boast a positive ESP, and investors may want to take a look at Tractor Supply (TSCO - Free Report) as well.
Slated to report earnings on April 20, 2023, Tractor Supply holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.71 a share 51 days from its next quarterly update.
For Tractor Supply, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.69 is +0.91%.
Because both stocks hold a positive Earnings ESP, WBA and TSCO 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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Why Investors Need to Take Advantage of These 2 Retail and Wholesale Stocks Now
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.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
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 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.
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 Walgreens Boots Alliance?
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. Walgreens Boots Alliance (WBA - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $1.15 a share, just 30 days from its upcoming earnings release on March 30, 2023.
Walgreens Boots Alliance's Earnings ESP sits at +3.6%, which, as explained above, is calculated by taking the percentage difference between the $1.15 Most Accurate Estimate and the Zacks Consensus Estimate of $1.11. WBA 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.
WBA is part of a big group of Retail and Wholesale stocks that boast a positive ESP, and investors may want to take a look at Tractor Supply (TSCO - Free Report) as well.
Slated to report earnings on April 20, 2023, Tractor Supply holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.71 a share 51 days from its next quarterly update.
For Tractor Supply, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.69 is +0.91%.
Because both stocks hold a positive Earnings ESP, WBA and TSCO 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 >>