We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Investors Need to Take Advantage of These 2 Consumer Staples Stocks Now
Read MoreHide Full Article
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.
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 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.
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 Hormel Foods?
The final step today is to look at a stock that meets our ESP qualifications. Hormel Foods (HRL - Free Report) earns a #3 (Hold) eight days from its next quarterly earnings release on May 30, 2024, and its Most Accurate Estimate comes in at $0.36 a share.
By taking the percentage difference between the $0.36 Most Accurate Estimate and the $0.35 Zacks Consensus Estimate, Hormel Foods has an Earnings ESP of +2.13%. Investors should also know that HRL 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.
HRL is one of just a large database of Consumer Staples stocks with positive ESPs. Another solid-looking stock is Anheuser-Busch Inbev (BUD - Free Report) .
Anheuser-Busch Inbev is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on August 1, 2024. BUD's Most Accurate Estimate sits at $0.86 a share 71 days from its next earnings release.
The Zacks Consensus Estimate for Anheuser-Busch Inbev is $0.84, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +2.38%.
HRL and BUD'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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Investors Need to Take Advantage of These 2 Consumer Staples 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.
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 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.
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 Hormel Foods?
The final step today is to look at a stock that meets our ESP qualifications. Hormel Foods (HRL - Free Report) earns a #3 (Hold) eight days from its next quarterly earnings release on May 30, 2024, and its Most Accurate Estimate comes in at $0.36 a share.
By taking the percentage difference between the $0.36 Most Accurate Estimate and the $0.35 Zacks Consensus Estimate, Hormel Foods has an Earnings ESP of +2.13%. Investors should also know that HRL 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.
HRL is one of just a large database of Consumer Staples stocks with positive ESPs. Another solid-looking stock is Anheuser-Busch Inbev (BUD - Free Report) .
Anheuser-Busch Inbev is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on August 1, 2024. BUD's Most Accurate Estimate sits at $0.86 a share 71 days from its next earnings release.
The Zacks Consensus Estimate for Anheuser-Busch Inbev is $0.84, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +2.38%.
HRL and BUD'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 >>