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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.
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 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.
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 Zimmer Biomet?
The final step today is to look at a stock that meets our ESP qualifications. Zimmer Biomet (ZBH - Free Report) earns a #3 (Hold) 30 days from its next quarterly earnings release on February 2, 2024, and its Most Accurate Estimate comes in at $2.16 a share.
By taking the percentage difference between the $2.16 Most Accurate Estimate and the $2.15 Zacks Consensus Estimate, Zimmer Biomet has an Earnings ESP of +0.4%. Investors should also know that ZBH 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.
ZBH is part of a big group of Medical stocks that boast a positive ESP, and investors may want to take a look at Catalyst Pharmaceutical (CPRX - Free Report) as well.
Slated to report earnings on March 20, 2024, Catalyst Pharmaceutical holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.50 a share 77 days from its next quarterly update.
The Zacks Consensus Estimate for Catalyst Pharmaceutical is $0.48, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +5.26%.
Because both stocks hold a positive Earnings ESP, ZBH and CPRX 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.
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 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.
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 Zimmer Biomet?
The final step today is to look at a stock that meets our ESP qualifications. Zimmer Biomet (ZBH - Free Report) earns a #3 (Hold) 30 days from its next quarterly earnings release on February 2, 2024, and its Most Accurate Estimate comes in at $2.16 a share.
By taking the percentage difference between the $2.16 Most Accurate Estimate and the $2.15 Zacks Consensus Estimate, Zimmer Biomet has an Earnings ESP of +0.4%. Investors should also know that ZBH 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.
ZBH is part of a big group of Medical stocks that boast a positive ESP, and investors may want to take a look at Catalyst Pharmaceutical (CPRX - Free Report) as well.
Slated to report earnings on March 20, 2024, Catalyst Pharmaceutical holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.50 a share 77 days from its next quarterly update.
The Zacks Consensus Estimate for Catalyst Pharmaceutical is $0.48, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +5.26%.
Because both stocks hold a positive Earnings ESP, ZBH and CPRX 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 >>