For Immediate Release
Chicago, IL – April 9, 2018 - Stocks in this week’s article Amazon.com Inc. (AMZN - Free Report) , Align Technology Inc. (ALGN - Free Report) , Axon Enterprise Inc. (AAXN - Free Report) , Antero Resources Corp. (AR - Free Report) and Jones Lang LaSalle Inc. (JLL - Free Report) .
Get Earnings Surprises from These Top 5 Stocks & Beat the Market Blues
The investing world is at present flustered with politics between the United States and China pertaining to trade. Both continue to slam import tariffs on each other. The heart of the last year’s market rally – the tech space – has also been wobbling lately on a host of issues.
Against this kind of a shaky investing backdrop, only sweet surprises in corporate earnings can pull the market up. This is because, what every investor would want now is a quality pick. Stocks that are likely to beat earnings estimates fall in that category. After all, it is a positive earnings surprise or a beat that matters the most, irrespective of earnings growth.
Why Is a Positive Earnings Surprise So Important?
Historically, stocks of companies with solid quarterly earnings (on a nominal basis) tank if they miss or merely meet market expectations. After all, a 20% earnings rise (though apparently looks good) doesn’t tell you if it has been decelerating.
Seasonal fluctuations also come into play. If a company’s Q1 is seasonally weak and Q4 is strong, it is likely to report a sequential earnings decline. In such cases, growth rates are misleading while judging the true health of a company.
It’s only after significant research and analysis on a company’s financials and initiatives that Wall Street analysts project its earnings. They also take a company’s guidance into consideration when deriving an earnings estimate.
Thus, outperforming that estimate is almost equivalent to beating the company’s own expectation as well as the market perception. If the margin of earnings surprise is big, it typically drives the stock higher right after the release. Thus, more than anything else, an earnings surprise can push a stock higher.
How to Locate Potential Outperformers?
Investors tend to look for stocks that have the potential to beat on the bottom line but might not always succeed. One way of identifying the winners beforehand is by looking at the earnings surprise history of a company.
An impressive track record in this regard generally acts as a driver. It indicates the company’s ability to exceed estimates. Investors generally believe that the company will have the same trick up its sleeve to deliver yet another earning beat in its upcoming release.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/298260/get-earnings-surprise-from-5-top-stocks-amp-beat-market-blues
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