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Why Investors Need to Take Advantage of These 2 Medical 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.
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.
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.
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.
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 UnitedHealth Group?
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. UnitedHealth Group (UNH - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $5.99 a share, just 24 days from its upcoming earnings release on January 12, 2024.
By taking the percentage difference between the $5.99 Most Accurate Estimate and the $5.98 Zacks Consensus Estimate, UnitedHealth Group has an Earnings ESP of +0.17%. Investors should also know that UNH 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.
UNH is part of a big group of Medical stocks that boast a positive ESP, and investors may want to take a look at Viatris (VTRS - Free Report) as well.
Viatris, which is readying to report earnings on February 26, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.69 a share, and VTRS is 69 days out from its next earnings report.
The Zacks Consensus Estimate for Viatris is $0.67, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +3.5%.
Because both stocks hold a positive Earnings ESP, UNH and VTRS 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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Why Investors Need to Take Advantage of These 2 Medical 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.
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.
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.
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.
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 UnitedHealth Group?
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. UnitedHealth Group (UNH - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $5.99 a share, just 24 days from its upcoming earnings release on January 12, 2024.
By taking the percentage difference between the $5.99 Most Accurate Estimate and the $5.98 Zacks Consensus Estimate, UnitedHealth Group has an Earnings ESP of +0.17%. Investors should also know that UNH 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.
UNH is part of a big group of Medical stocks that boast a positive ESP, and investors may want to take a look at Viatris (VTRS - Free Report) as well.
Viatris, which is readying to report earnings on February 26, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.69 a share, and VTRS is 69 days out from its next earnings report.
The Zacks Consensus Estimate for Viatris is $0.67, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +3.5%.
Because both stocks hold a positive Earnings ESP, UNH and VTRS 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 >>