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Why Investors Need to Take Advantage of These 2 Computer and Technology 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.
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.
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 Applied Materials?
The final step today is to look at a stock that meets our ESP qualifications. Applied Materials (AMAT - Free Report) earns a #2 (Buy) 20 days from its next quarterly earnings release on November 16, 2023, and its Most Accurate Estimate comes in at $2 a share.
AMAT has an Earnings ESP figure of +0.86%, which, as explained above, is calculated by taking the percentage difference between the $2 Most Accurate Estimate and the Zacks Consensus Estimate of $1.98. Applied 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.
AMAT is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is ON Semiconductor Corp. (ON - Free Report) .
ON Semiconductor Corp. which is readying to report earnings on October 30, 2023, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $1.36 a share, and ON is three days out from its next earnings report.
For ON Semiconductor Corp. the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.35 is +1%.
AMAT and ON'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 Computer and Technology 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.
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.
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 Applied Materials?
The final step today is to look at a stock that meets our ESP qualifications. Applied Materials (AMAT - Free Report) earns a #2 (Buy) 20 days from its next quarterly earnings release on November 16, 2023, and its Most Accurate Estimate comes in at $2 a share.
AMAT has an Earnings ESP figure of +0.86%, which, as explained above, is calculated by taking the percentage difference between the $2 Most Accurate Estimate and the Zacks Consensus Estimate of $1.98. Applied 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.
AMAT is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is ON Semiconductor Corp. (ON - Free Report) .
ON Semiconductor Corp. which is readying to report earnings on October 30, 2023, sits at a Zacks Rank #2 (Buy) right now. It's Most Accurate Estimate is currently $1.36 a share, and ON is three days out from its next earnings report.
For ON Semiconductor Corp. the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.35 is +1%.
AMAT and ON'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 >>