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5 Must-Buy Top Stocks Poised to Gain on Earnings Next Week

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The fourth-quarter earnings season is in full swing and earnings trends are showing improvement. Although corporate earnings growth was negative year over year in the first three quarters of last year, results were far better than initially anticipated. Below we will discuss how the reporting cycle is faring and present five stocks that are poised to beat earnings estimates next week.

Fourth-Quarter Earnings Results Improving  

Fourth-quarter 2019 earnings results are improving gradually. However, overall earnings are still expected to dip.

As of Jan 29, 141 S&P 500 members reported fourth-quarter earnings results. Total earnings of these companies are down 0.6% from the same period last year on 2.7% higher revenues. Of the total, 70.2% surpassed EPS estimates while 68.8% outpaced revenue estimates.

As of Jan 29, fourth-quarter 2019 earnings for the S&P 500 Index were projected to be down 2.3% year over year on 3.9% higher revenues. This suggests good improvement from earnings decline of 3.2% in fourth-quarter 2018 on 3.5% higher revenues, projected at the beginning of the reporting cycle. (Read More: Earnings Outlook Improving)

5 Stocks Set to Surpass Earnings Estimates

We have narrowed down our search to five companies that are gearing up to release their earnings results next week. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.

Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are expected to soar after earnings release. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The chart below shows the price performance of our five picks in the past three months.

PotlatchDeltic Corp. PCH is a Real Estate Investment Trust with acres of timberland in Alabama, Arkansas, Idaho, Minnesota and Mississippi. The Zacks Rank #2 company has an Earnings ESP of +15% for the fourth quarter.

PotlatchDeltic has an expected earnings growth rate of 42.5% for the current year. The Zacks Consensus Estimate for the current year has improved 1% over the last 30 days. The last four-quarter positive earnings surprise is 44%, on average. PotlatchDeltic is set to release earnings results on Feb 3, after the closing bell.

RenaissanceRe Holdings Ltd. RNR provides reinsurance and insurance products in the United States and internationally. It operates through Property & Casualty and Specialty segments. The Zacks Rank #2 company has an Earnings ESP of +18.32% for the fourth quarter.

RenaissanceRe has an expected earnings growth rate of 56.7% for the current year. The Zacks Consensus Estimate for the current year has improved 0.2% over the last 30 days. The last four-quarter positive earnings surprise is 23.3%, on average. RenaissanceRe is set to release earnings results on Feb 4, after the closing bell.

Royal Gold Inc. (RGLD - Free Report) acquires and manages precious metals stream and royalty interests, with a primary focus on gold. The Zacks Rank #1 company has an Earnings ESP of +0.78% for the second quarter of fiscal 2020 (ended December).

Royal Gold has an expected earnings growth rate of 83.5% for the current year (ending June 2020). The Zacks Consensus Estimate for the current year has improved 2.3% over the last 30 days. Royal Gold is set to release earnings results on Feb 5, after the closing bell.

NGL Energy Partners LP NGL is engaged in the crude oil logistics, water solutions, liquids, and refined products and renewables businesses. The Zacks Rank #1 company has an Earnings ESP of +36.84% for the third quarter of fiscal 2020 (ended December). The Zacks Consensus Estimate for the current year has improved 6.7% over the last 30 days. NGL Energy is set to release earnings results on Feb 6, before the opening bell.

Silicon Motion Technology Corp. SIMO designs, develops and markets NAND flash controllers for solid state storage devices worldwide. The Zacks Rank #1 company has an Earnings ESP of +5.88% for the fourth quarter.

Silicon Motion has an expected earnings growth rate of 28.2% for the current year. The Zacks Consensus Estimate for the current year has improved 3.6% over the last 30 days. The last four-quarter positive earnings surprise is 13.4%, on average. Silicon Motion is set to release earnings results on Feb 6, after the closing bell.

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