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Why Investors Need to Take Advantage of These 2 Retail and Wholesale Stocks Now
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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.
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.
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 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.
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 Chewy?
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. Chewy (CHWY - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $0.24 a share 12 days away from its upcoming earnings release on December 4, 2024.
CHWY has an Earnings ESP figure of +3.23%, which, as explained above, is calculated by taking the percentage difference between the $0.24 Most Accurate Estimate and the Zacks Consensus Estimate of $0.23. Chewy 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.
CHWY is part of a big group of Retail and Wholesale stocks that boast a positive ESP, and investors may want to take a look at Cracker Barrel Old Country Store (CBRL - Free Report) as well.
Slated to report earnings on February 25, 2025, Cracker Barrel Old Country Store holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.09 a share 95 days from its next quarterly update.
Cracker Barrel Old Country Store's Earnings ESP figure currently stands at +5.83% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.03.
CHWY and CBRL'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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Why Investors Need to Take Advantage of These 2 Retail and Wholesale Stocks Now
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.
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.
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 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.
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 Chewy?
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. Chewy (CHWY - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $0.24 a share 12 days away from its upcoming earnings release on December 4, 2024.
CHWY has an Earnings ESP figure of +3.23%, which, as explained above, is calculated by taking the percentage difference between the $0.24 Most Accurate Estimate and the Zacks Consensus Estimate of $0.23. Chewy 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.
CHWY is part of a big group of Retail and Wholesale stocks that boast a positive ESP, and investors may want to take a look at Cracker Barrel Old Country Store (CBRL - Free Report) as well.
Slated to report earnings on February 25, 2025, Cracker Barrel Old Country Store holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.09 a share 95 days from its next quarterly update.
Cracker Barrel Old Country Store's Earnings ESP figure currently stands at +5.83% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.03.
CHWY and CBRL'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 >>