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Why Investors Need to Take Advantage of These 2 Finance 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.
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.
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.
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 #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, 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 Progressive?
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. Progressive (PGR - Free Report) earns a #1 (Strong Buy) right now and its Most Accurate Estimate sits at $2.75 a share, just 24 days from its upcoming earnings release on April 11, 2024.
PGR has an Earnings ESP figure of +3.53%, which, as explained above, is calculated by taking the percentage difference between the $2.75 Most Accurate Estimate and the Zacks Consensus Estimate of $2.66. Progressive 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.
PGR is part of a big group of Finance stocks that boast a positive ESP, and investors may want to take a look at Prudential (PRU - Free Report) as well.
Slated to report earnings on May 7, 2024, Prudential holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $3.33 a share 50 days from its next quarterly update.
For Prudential, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.30 is +1.06%.
Because both stocks hold a positive Earnings ESP, PGR and PRU 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 Finance 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.
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.
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.
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 #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, 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 Progressive?
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. Progressive (PGR - Free Report) earns a #1 (Strong Buy) right now and its Most Accurate Estimate sits at $2.75 a share, just 24 days from its upcoming earnings release on April 11, 2024.
PGR has an Earnings ESP figure of +3.53%, which, as explained above, is calculated by taking the percentage difference between the $2.75 Most Accurate Estimate and the Zacks Consensus Estimate of $2.66. Progressive 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.
PGR is part of a big group of Finance stocks that boast a positive ESP, and investors may want to take a look at Prudential (PRU - Free Report) as well.
Slated to report earnings on May 7, 2024, Prudential holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $3.33 a share 50 days from its next quarterly update.
For Prudential, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $3.30 is +1.06%.
Because both stocks hold a positive Earnings ESP, PGR and PRU 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 >>