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These 2 Construction Stocks Could Beat Earnings: Why They Should Be on Your Radar
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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.
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.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
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.
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 Vulcan Materials?
The final step today is to look at a stock that meets our ESP qualifications. Vulcan Materials (VMC - Free Report) earns a #2 (Buy) 16 days from its next quarterly earnings release on August 3, 2023, and its Most Accurate Estimate comes in at $2.03 a share.
VMC has an Earnings ESP figure of +5.94%, which, as explained above, is calculated by taking the percentage difference between the $2.03 Most Accurate Estimate and the Zacks Consensus Estimate of $1.92. Vulcan Materials 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.
VMC is just one of a large group of Construction stocks with a positive ESP figure. Meritage Homes (MTH - Free Report) is another qualifying stock you may want to consider.
Meritage Homes is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on July 27, 2023. MTH's Most Accurate Estimate sits at $3.52 a share nine days from its next earnings release.
For Meritage Homes, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.49 is +0.98%.
VMC and MTH's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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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These 2 Construction Stocks Could Beat Earnings: Why They Should Be on Your Radar
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.
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.
Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.
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.
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 Vulcan Materials?
The final step today is to look at a stock that meets our ESP qualifications. Vulcan Materials (VMC - Free Report) earns a #2 (Buy) 16 days from its next quarterly earnings release on August 3, 2023, and its Most Accurate Estimate comes in at $2.03 a share.
VMC has an Earnings ESP figure of +5.94%, which, as explained above, is calculated by taking the percentage difference between the $2.03 Most Accurate Estimate and the Zacks Consensus Estimate of $1.92. Vulcan Materials 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.
VMC is just one of a large group of Construction stocks with a positive ESP figure. Meritage Homes (MTH - Free Report) is another qualifying stock you may want to consider.
Meritage Homes is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on July 27, 2023. MTH's Most Accurate Estimate sits at $3.52 a share nine days from its next earnings release.
For Meritage Homes, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.49 is +0.98%.
VMC and MTH's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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 >>