Why Investors Need to Take Advantage of These 2 Finance Stocks Now
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.
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 Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information. With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the 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. Arch Capital Group (ACGL) earns a Zacks Rank #3 right now and its Most Accurate Estimate sits at $1.96 a share, just seven days from its upcoming earnings release on February 14, 2024.
Arch Capital Group's Earnings ESP sits at 1.24%, which, as explained above, is calculated by taking the percentage difference between the $1.96 Most Accurate Estimate and the Zacks Consensus Estimate of $1.94.
ACGL is just one of a large group of Finance stocks with a positive ESP figure. RLI Corp. (RLI) is another qualifying stock you may want to consider.
Slated to report earnings on April 17, 2024, RLI Corp. holds a #3 (Hold) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.65 a share 70 days from its next quarterly update.
RLI Corp.'s Earnings ESP figure currently stands at 3.77% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.59.
ACGL and RLI'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 >>
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
Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
RLI Corp. (RLI) : Free Stock Analysis Report
