How to Boost Your Portfolio with Top Basic Materials Stocks Set to Beat Earnings
Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
2 Stocks to Add to Your Watchlist
The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Cleveland-Cliffs (CLF) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at -$0.11 a share, just 24 days from its upcoming earnings release on April 28, 2023.
Cleveland-Cliffs' Earnings ESP sits at 48.24%, which, as explained above, is calculated by taking the percentage difference between the -$0.11 Most Accurate Estimate and the Zacks Consensus Estimate of -$0.21.
CLF is part of a big group of Basic Materials stocks that boast a positive ESP, and investors may want to take a look at Allegheny Technologies (ATI) as well.
Allegheny Technologies, which is readying to report earnings on May 4, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $0.48 a share, and ATI is 30 days out from its next earnings report.
For Allegheny Technologies, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.47 is 1.27%.
Because both stocks hold a positive Earnings ESP, CLF and ATI could potentially post earnings beats in their next reports.
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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Cleveland-Cliffs Inc. (CLF) : Free Stock Analysis Report
ATI Inc. (ATI) : Free Stock Analysis Report
