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How to Boost Your Portfolio with Top Oils and Energy Stocks Set to Beat Earnings
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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.
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.
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.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 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 Canadian Solar?
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. Canadian Solar (CSIQ - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at -$0.19 a share 21 days away from its upcoming earnings release on May 9, 2024.
By taking the percentage difference between the -$0.19 Most Accurate Estimate and the -$0.26 Zacks Consensus Estimate, Canadian Solar has an Earnings ESP of +29.52%. Investors should also know that CSIQ 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.
CSIQ is one of just a large database of Oils and Energy stocks with positive ESPs. Another solid-looking stock is Nextracker (NXT - Free Report) .
Slated to report earnings on May 8, 2024, Nextracker holds a #1 (Strong Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.74 a share 20 days from its next quarterly update.
Nextracker's Earnings ESP figure currently stands at +23.75% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.60.
CSIQ and NXT's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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 Oils and Energy Stocks Set to Beat Earnings
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.
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.
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.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 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 Canadian Solar?
The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. Canadian Solar (CSIQ - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at -$0.19 a share 21 days away from its upcoming earnings release on May 9, 2024.
By taking the percentage difference between the -$0.19 Most Accurate Estimate and the -$0.26 Zacks Consensus Estimate, Canadian Solar has an Earnings ESP of +29.52%. Investors should also know that CSIQ 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.
CSIQ is one of just a large database of Oils and Energy stocks with positive ESPs. Another solid-looking stock is Nextracker (NXT - Free Report) .
Slated to report earnings on May 8, 2024, Nextracker holds a #1 (Strong Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $0.74 a share 20 days from its next quarterly update.
Nextracker's Earnings ESP figure currently stands at +23.75% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.60.
CSIQ and NXT's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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 >>