Why Investors Need to Take Advantage of These 2 Finance Stocks Now
Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.
The earnings figure itself is key, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb even higher.
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 last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Huntington Bancshares (HBAN) holds a Zacks Rank #2 at the moment and its Most Accurate Estimate comes in at $0.42 a share 30 days away from its upcoming earnings release on January 20, 2023.
HBAN has an Earnings ESP figure of 3.11%, which, as explained above, is calculated by taking the percentage difference between the $0.42 Most Accurate Estimate and the Zacks Consensus Estimate of $0.40.
HBAN is one of just a large database of Finance stocks with positive ESPs. Another solid-looking stock is Capital Southwest (CSWC).
Capital Southwest is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on January 30, 2023. CSWC's Most Accurate Estimate sits at $0.59 a share 40 days from its next earnings release.
For Capital Southwest, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.57 is 3.08%.
Because both stocks hold a positive Earnings ESP, HBAN and CSWC 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 >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Huntington Bancshares Incorporated (HBAN) : Free Stock Analysis Report
Capital Southwest Corporation (CSWC) : Free Stock Analysis Report
