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Why Investors Need to Take Advantage of These 2 Utilities Stocks Now
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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.
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 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.
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 Consolidated Water?
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. Consolidated Water (CWCO - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $0.48 a share, just seven days from its upcoming earnings release on March 28, 2024.
CWCO has an Earnings ESP figure of +5.88%, which, as explained above, is calculated by taking the percentage difference between the $0.48 Most Accurate Estimate and the Zacks Consensus Estimate of $0.45. Consolidated Water 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.
CWCO is one of just a large database of Utilities stocks with positive ESPs. Another solid-looking stock is Duke Energy (DUK - Free Report) .
Slated to report earnings on May 14, 2024, Duke Energy holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.50 a share 54 days from its next quarterly update.
Duke Energy's Earnings ESP figure currently stands at +7.36% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.39.
Because both stocks hold a positive Earnings ESP, CWCO and DUK 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 Utilities Stocks Now
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.
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 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.
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 Consolidated Water?
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. Consolidated Water (CWCO - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $0.48 a share, just seven days from its upcoming earnings release on March 28, 2024.
CWCO has an Earnings ESP figure of +5.88%, which, as explained above, is calculated by taking the percentage difference between the $0.48 Most Accurate Estimate and the Zacks Consensus Estimate of $0.45. Consolidated Water 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.
CWCO is one of just a large database of Utilities stocks with positive ESPs. Another solid-looking stock is Duke Energy (DUK - Free Report) .
Slated to report earnings on May 14, 2024, Duke Energy holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.50 a share 54 days from its next quarterly update.
Duke Energy's Earnings ESP figure currently stands at +7.36% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.39.
Because both stocks hold a positive Earnings ESP, CWCO and DUK 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 >>