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How to Boost Your Portfolio with Top Basic Materials Stocks Set to Beat Earnings
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Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
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.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
The Zacks Earnings ESP, Explained
The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
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.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), 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 Agnico Eagle Mines?
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. Agnico Eagle Mines (AEM - Free Report) holds a #2 (Buy) at the moment and its Most Accurate Estimate comes in at $0.60 a share two days away from its upcoming earnings release on April 25, 2024.
Agnico Eagle Mines' Earnings ESP sits at +3.15%, which, as explained above, is calculated by taking the percentage difference between the $0.60 Most Accurate Estimate and the Zacks Consensus Estimate of $0.58. AEM is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
AEM is part of a big group of Basic Materials stocks that boast a positive ESP, and investors may want to take a look at Lithium Americas Corp. (LAC - Free Report) as well.
Slated to report earnings on June 21, 2024, Lithium Americas Corp. holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is -$0.01 a share 59 days from its next quarterly update.
Lithium Americas Corp.'s Earnings ESP figure currently stands at +70.86% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.04.
AEM and LAC's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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 Basic Materials Stocks Set to Beat Earnings
Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
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.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
The Zacks Earnings ESP, Explained
The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
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.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), 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 Agnico Eagle Mines?
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. Agnico Eagle Mines (AEM - Free Report) holds a #2 (Buy) at the moment and its Most Accurate Estimate comes in at $0.60 a share two days away from its upcoming earnings release on April 25, 2024.
Agnico Eagle Mines' Earnings ESP sits at +3.15%, which, as explained above, is calculated by taking the percentage difference between the $0.60 Most Accurate Estimate and the Zacks Consensus Estimate of $0.58. AEM is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
AEM is part of a big group of Basic Materials stocks that boast a positive ESP, and investors may want to take a look at Lithium Americas Corp. (LAC - Free Report) as well.
Slated to report earnings on June 21, 2024, Lithium Americas Corp. holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is -$0.01 a share 59 days from its next quarterly update.
Lithium Americas Corp.'s Earnings ESP figure currently stands at +70.86% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of -$0.04.
AEM and LAC's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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 >>