Why Investors Need to Take Advantage of These 2 Construction Stocks Now
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. D.R. Horton (DHI) earns a Zacks Rank #3 28 days from its next quarterly earnings release on January 23, 2024, and its Most Accurate Estimate comes in at $2.89 a share.
DHI has an Earnings ESP figure of 0.84%, which, as explained above, is calculated by taking the percentage difference between the $2.89 Most Accurate Estimate and the Zacks Consensus Estimate of $2.86.
DHI is just one of a large group of Construction stocks with a positive ESP figure. Watsco (WSO) is another qualifying stock you may want to consider.
Watsco, which is readying to report earnings on February 15, 2024, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $2.75 a share, and WSO is 51 days out from its next earnings report.
The Zacks Consensus Estimate for Watsco is $2.56, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 7.29%.
DHI and WSO'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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D.R. Horton, Inc. (DHI) : Free Stock Analysis Report
Watsco, Inc. (WSO) : Free Stock Analysis Report
