Chicago, IL – July 26, 2011 - Stocks in this week's article include Toll Brothers, Inc. (NYSE: TOL), AvalonBay Communities, Inc. (NYSE: AVB), Global Geophysical Services, Inc. (NYSE: GGS), Eldorado Gold Corporation (NYSE: EGO) and United Stationers Inc. (NASDAQ: USTR). Kevin Matras goes over a screen that finds companies with accelerated earnings growth and shows how you can find them too.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
In good markets or bad, earnings are one of the most important things that influence stock prices. But instead of just looking at the most recent quarter's earnings, try looking for earnings acceleration too. With earnings season underway, this is a good time to go over this.
Studies have shown that almost all of the most successful stocks in the past had displayed accelerated earnings BEFORE their most impressive price moves.
Sideways 'percentage earnings growth' (even if they're good) or decelerating 'percentage earnings growth' (strong or not) can potentially signal a period of consolidation (or slowdown), which in turn can flatten out prices or send them lower.
But increasing 'percentage earnings growth' (consistently improving from the company's prior percentage of earnings growth) can often be the difference between good stocks and great stocks.
When a company reports earnings, take a look at their numbers, and then see how their current % EPS Growth stacks up to their previous period's % EPS Growth (and the period prior to that). Moreover, take a look at how their Earnings Growth is forecasted in their next reporting period as well.
In this screen, I'm focusing on increasing 'percentage earnings growth' and projected 'percentage earnings growth'...
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