We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
How to Find Strong Retail and Wholesale Stocks Slated for Positive Earnings Surprises
Read MoreHide Full Article
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.
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.
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.
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.
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 Kura Sushi?
The final step today is to look at a stock that meets our ESP qualifications. Kura Sushi (KRUS - Free Report) earns a #3 (Hold) 10 days from its next quarterly earnings release on July 6, 2023, and its Most Accurate Estimate comes in at $0.07 a share.
By taking the percentage difference between the $0.07 Most Accurate Estimate and the $0.05 Zacks Consensus Estimate, Kura Sushi has an Earnings ESP of +40%. Investors should also know that KRUS 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.
KRUS is one of just a large database of Retail and Wholesale stocks with positive ESPs. Another solid-looking stock is Booking Holdings (BKNG - Free Report) .
Booking Holdings, which is readying to report earnings on August 2, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $29.14 a share, and BKNG is 37 days out from its next earnings report.
Booking Holdings' Earnings ESP figure currently stands at +1.16% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $28.81.
Because both stocks hold a positive Earnings ESP, KRUS and BKNG 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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
How to Find Strong Retail and Wholesale Stocks Slated for Positive Earnings Surprises
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.
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.
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.
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.
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 Kura Sushi?
The final step today is to look at a stock that meets our ESP qualifications. Kura Sushi (KRUS - Free Report) earns a #3 (Hold) 10 days from its next quarterly earnings release on July 6, 2023, and its Most Accurate Estimate comes in at $0.07 a share.
By taking the percentage difference between the $0.07 Most Accurate Estimate and the $0.05 Zacks Consensus Estimate, Kura Sushi has an Earnings ESP of +40%. Investors should also know that KRUS 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.
KRUS is one of just a large database of Retail and Wholesale stocks with positive ESPs. Another solid-looking stock is Booking Holdings (BKNG - Free Report) .
Booking Holdings, which is readying to report earnings on August 2, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $29.14 a share, and BKNG is 37 days out from its next earnings report.
Booking Holdings' Earnings ESP figure currently stands at +1.16% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $28.81.
Because both stocks hold a positive Earnings ESP, KRUS and BKNG 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 >>