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How to Boost Your Portfolio with Top Basic Materials Stocks Set to Beat Earnings
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Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
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.
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 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 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 Commercial Metals?
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. Commercial Metals (CMC - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $1.89 a share, just 28 days from its upcoming earnings release on October 12, 2023.
CMC has an Earnings ESP figure of +0.71%, which, as explained above, is calculated by taking the percentage difference between the $1.89 Most Accurate Estimate and the Zacks Consensus Estimate of $1.88. Commercial Metals 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.
CMC is just one of a large group of Basic Materials stocks with a positive ESP figure. United States Steel (X - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on October 26, 2023, United States Steel holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.92 a share 42 days from its next quarterly update.
United States Steel's Earnings ESP figure currently stands at +1.15% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.91.
Because both stocks hold a positive Earnings ESP, CMC and X 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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How to Boost Your Portfolio with Top Basic Materials Stocks Set to Beat Earnings
Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
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.
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 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 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 Commercial Metals?
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. Commercial Metals (CMC - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $1.89 a share, just 28 days from its upcoming earnings release on October 12, 2023.
CMC has an Earnings ESP figure of +0.71%, which, as explained above, is calculated by taking the percentage difference between the $1.89 Most Accurate Estimate and the Zacks Consensus Estimate of $1.88. Commercial Metals 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.
CMC is just one of a large group of Basic Materials stocks with a positive ESP figure. United States Steel (X - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on October 26, 2023, United States Steel holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.92 a share 42 days from its next quarterly update.
United States Steel's Earnings ESP figure currently stands at +1.15% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.91.
Because both stocks hold a positive Earnings ESP, CMC and X 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 >>