How to Find Strong Construction Stocks Slated for Positive Earnings Surprises
Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
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, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction.
The final step today is to look at a stock that meets our ESP qualifications. Dycom Industries (DY) earns a Zacks Rank #1 29 days from its next quarterly earnings release on November 28, 2023, and its Most Accurate Estimate comes in at $1.79 a share.
Dycom Industries' Earnings ESP sits at 1.24%, which, as explained above, is calculated by taking the percentage difference between the $1.79 Most Accurate Estimate and the Zacks Consensus Estimate of $1.77.
DY is part of a big group of Construction stocks that boast a positive ESP, and investors may want to take a look at Vulcan Materials (VMC) as well.
Slated to report earnings on February 15, 2024, Vulcan Materials holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.37 a share 108 days from its next quarterly update.
Vulcan Materials' Earnings ESP figure currently stands at 2.52% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.34.
DY and VMC's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
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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Dycom Industries, Inc. (DY) : Free Stock Analysis Report
Vulcan Materials Company (VMC) : Free Stock Analysis Report
