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These 2 Auto, Tires and Trucks Stocks Could Beat Earnings: Why They Should Be on Your Radar
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Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
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.
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, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
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 Genuine Parts?
The final step today is to look at a stock that meets our ESP qualifications. Genuine Parts (GPC - Free Report) earns a #3 (Hold) 30 days from its next quarterly earnings release on April 18, 2024, and its Most Accurate Estimate comes in at $2.17 a share.
By taking the percentage difference between the $2.17 Most Accurate Estimate and the $2.16 Zacks Consensus Estimate, Genuine Parts has an Earnings ESP of +0.46%. Investors should also know that GPC 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.
GPC is just one of a large group of Auto, Tires and Trucks stocks with a positive ESP figure. Ferrari (RACE - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on May 2, 2024, Ferrari holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $2.11 a share 44 days from its next quarterly update.
The Zacks Consensus Estimate for Ferrari is $2.04, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +3.6%.
Because both stocks hold a positive Earnings ESP, GPC and RACE 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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These 2 Auto, Tires and Trucks Stocks Could Beat Earnings: Why They Should Be on Your Radar
Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
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.
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, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.
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 Genuine Parts?
The final step today is to look at a stock that meets our ESP qualifications. Genuine Parts (GPC - Free Report) earns a #3 (Hold) 30 days from its next quarterly earnings release on April 18, 2024, and its Most Accurate Estimate comes in at $2.17 a share.
By taking the percentage difference between the $2.17 Most Accurate Estimate and the $2.16 Zacks Consensus Estimate, Genuine Parts has an Earnings ESP of +0.46%. Investors should also know that GPC 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.
GPC is just one of a large group of Auto, Tires and Trucks stocks with a positive ESP figure. Ferrari (RACE - Free Report) is another qualifying stock you may want to consider.
Slated to report earnings on May 2, 2024, Ferrari holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $2.11 a share 44 days from its next quarterly update.
The Zacks Consensus Estimate for Ferrari is $2.04, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +3.6%.
Because both stocks hold a positive Earnings ESP, GPC and RACE 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 >>