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How to Boost Your Portfolio with Top Retail and Wholesale 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 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.
The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
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.
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 CVS Health?
The final step today is to look at a stock that meets our ESP qualifications. CVS Health (CVS - Free Report) earns a #3 (Hold) 26 days from its next quarterly earnings release on February 7, 2024, and its Most Accurate Estimate comes in at $2.01 a share.
By taking the percentage difference between the $2.01 Most Accurate Estimate and the $1.98 Zacks Consensus Estimate, CVS Health has an Earnings ESP of +1.4%. Investors should also know that CVS 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.
CVS is one of just a large database of Retail and Wholesale stocks with positive ESPs. Another solid-looking stock is Stitch Fix (SFIX - Free Report) .
Slated to report earnings on March 5, 2024, Stitch Fix holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is -$0.20 a share 53 days from its next quarterly update.
Stitch Fix's Earnings ESP figure currently stands at +5.76% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.21.
Because both stocks hold a positive Earnings ESP, CVS and SFIX 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 Retail and Wholesale 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 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.
The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction. The Zacks Rank is also factored into the ESP metric to better help find companies that appear poised to top their next bottom-line consensus estimate, which will hopefully help lift the stock price.
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.
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 CVS Health?
The final step today is to look at a stock that meets our ESP qualifications. CVS Health (CVS - Free Report) earns a #3 (Hold) 26 days from its next quarterly earnings release on February 7, 2024, and its Most Accurate Estimate comes in at $2.01 a share.
By taking the percentage difference between the $2.01 Most Accurate Estimate and the $1.98 Zacks Consensus Estimate, CVS Health has an Earnings ESP of +1.4%. Investors should also know that CVS 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.
CVS is one of just a large database of Retail and Wholesale stocks with positive ESPs. Another solid-looking stock is Stitch Fix (SFIX - Free Report) .
Slated to report earnings on March 5, 2024, Stitch Fix holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is -$0.20 a share 53 days from its next quarterly update.
Stitch Fix's Earnings ESP figure currently stands at +5.76% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.21.
Because both stocks hold a positive Earnings ESP, CVS and SFIX 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 >>