There are many things we may consider when choosing stocks for our portfolio.
Depending on our investment horizon, some of these may be short-term factors while others, longer-term.
Depending on our need for cash and risk appetite, we may try to make the most of daily market movements, or hold on in the hopes that the overall financial health/stability of a company will yield higher value in the form of dividends or share price appreciation.
We may also look for exposure to certain industries because stocks belonging to industries with strong growth potential may generate high returns, or stocks of more mature industries that may offer steady dividends.
So our gains are highly individual and depend on our own needs and preferences that we then try to match with what the market has to offer.
Given this backdrop, let us take a look at rising estimates as a factor guiding our investment decision. Estimates move up generally when analysts covering a stock see that the company has the strength in fundamentals to support continued earnings growth. This could mean that it has a good revenue generating model, that the market in which it operates is conducive to such growth and there are one or more other factors such as strong IP, brand value, operating leverage, etc. that can support this growth.
In addition, if the company has a good earnings surprise history, it usually means that the estimates are conservative (likely because management is more conservative) meaning that the chances of positive surprises and consequent share price appreciation are higher.
Here are some Zacks Rank #1 (Strong Buy) stocks that recently posted big earnings surprises and saw positive estimate revisions. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NVIDIA Corporation (NVDA - Free Report)
NVIDIA Corporation is the leading producer of graphics processors and media communications devices in the world. Other than GPUs for gaming, the company’s latest product lineup including its NVIDIA® Tesla® accelerated computing platform, the NVIDIA VoltaGPU platform and the NVIDIA GPU Cloud (NGC) support artificial intelligence in the cloud and across a range of devices from automotive to IoT.
Zacks Rank #1
Zacks Industry Rank #27 out of 265
Last EPS Surprise 48.3%
Last 4-quarter average surprise 40.8%
Estimate for current year ending January up 32.6% in the last 60 days
Estimate for next year up 22.2%
Virtu Financial, Inc. (VIRT - Free Report)
Headquartered in New York, Virtu Financial, Inc. is a financial holding company. The company offers a technology platform through which it provides quotations to buyers and sellers in equities, commodities, currencies, options, fixed income and other securities on exchanges, markets and liquidity pools.
Zacks Rank #1
Zacks Industry Rank #99 out of 265
Last EPS Surprise 69.2%
Last 4-quarter average surprise 18.7%
Estimate for current year ending December up 82.8% in the last 60 days
Estimate for next year up 70.4%
Kulicke and Soffa Industries, Inc. (KLIC - Free Report)
Kulicke & Soffa is a leading provider of semiconductor packaging and electronic assembly solutions supporting the global automotive, consumer, communications, computing and industrial segments. Recent acquisitions and product development efforts have further expanded its portfolio and helped it maintain its technology leadership to meet the challenges of packaging and assembling for the next-generation of electronic devices.
Zacks Rank #1
Zacks Industry Rank #125 out of 265
Last EPS Surprise 96.2%
Last 4-quarter average surprise 49.1%
Estimate for current year ending September up 32.0% in the last 60 days
Estimate for next year up 23.7%
Pioneer Natural Resources Company (PXD - Free Report)
Pioneer Natural Resources Company is a Texas-based independent exploration and production company delivers industry-leading production and reserve growth through onshore, unconventional, oil and gas resource development in the U.S. The company provides administrative, financial and management support to domestic and foreign subsidiaries that are engaged in exploration, development and production of oil and natural gas liquid as well as in building natural gas reserves.
Zacks Rank #1
Zacks Industry Rank #126 out of 265
Last EPS Surprise 60.5%
Last 4-quarter average surprise 66.9%
Estimate for current year ending December up 61.2% in the last 60 days
Estimate for next year up 40.9%
Paycom Software, Inc. (PAYC - Free Report)
Headquartered in Oklahoma City, Paycom Software, Inc. has developed a cloud-based human capital management (HCM) software solution that is delivered as a Software-as-a-Service (SaaS) solution. The solution enables day-to-day functionality along with data analytics that can be leveraged by businesses to manage the complete employment life cycle from recruitment to retirement.
Its HCM solution offers a suite of applications in the areas of talent acquisition, time and labor management, and payroll. It also provides talent management applications, and HR management applications.
Zacks Rank #1
Zacks Industry Rank #217 out of 265
Last EPS Surprise 26.1%
Last 4-quarter average surprise 30.2%
Estimate for current year ending December up 61.8% in the last 60 days
Estimate for next year up 61.9%
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>