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Why Investors Need to Take Advantage of These 2 Oils and Energy Stocks Now
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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.
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.
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 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.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 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 Sunrun?
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. Sunrun (RUN - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $0.56 a share, just six days from its upcoming earnings release on November 1, 2023.
RUN has an Earnings ESP figure of +1308.32%, which, as explained above, is calculated by taking the percentage difference between the $0.56 Most Accurate Estimate and the Zacks Consensus Estimate of -$0.05. Sunrun 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.
RUN is part of a big group of Oils and Energy stocks that boast a positive ESP, and investors may want to take a look at Kinder Morgan (KMI - Free Report) as well.
Kinder Morgan, which is readying to report earnings on January 17, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.32 a share, and KMI is 83 days out from its next earnings report.
Kinder Morgan's Earnings ESP figure currently stands at +5.59% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.30.
RUN and KMI'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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Why Investors Need to Take Advantage of These 2 Oils and Energy Stocks Now
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.
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.
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 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.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 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 Sunrun?
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. Sunrun (RUN - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $0.56 a share, just six days from its upcoming earnings release on November 1, 2023.
RUN has an Earnings ESP figure of +1308.32%, which, as explained above, is calculated by taking the percentage difference between the $0.56 Most Accurate Estimate and the Zacks Consensus Estimate of -$0.05. Sunrun 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.
RUN is part of a big group of Oils and Energy stocks that boast a positive ESP, and investors may want to take a look at Kinder Morgan (KMI - Free Report) as well.
Kinder Morgan, which is readying to report earnings on January 17, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.32 a share, and KMI is 83 days out from its next earnings report.
Kinder Morgan's Earnings ESP figure currently stands at +5.59% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.30.
RUN and KMI'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 >>