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Zacks.com featured highlights: Caterpillar, Oshkosh, Arista Networks, NVIDIA and H&E Equipment Services

Zacks Equity Research
Is (ALGN) Outperforming Other Medical Stocks This Year?

For Immediate Release

Chicago, IL – December 15, 2017 - Stocks in this week’s article Caterpillar Inc. CAT, Oshkosh Corp OSK, Arista Networks Inc. ANET, NVIDIA Corp NVDA and H&E Equipment Services Inc. HEES.

Play Earnings Beats with These Top 5 Stocks

 

There is no mystery behind investors’ hunt for stocks with estimate beating potential ahead of an earnings season. This is because investors always try to place themselves ahead of time and look to play stocks that are rich in quality.

Why Is a Positive Earnings Surprise So Important?

Historically, stocks of companies with solid quarterly earnings (on a nominal basis) tank if they miss or merely meet market expectations. After all, a 20% earnings rise (though apparently looks good) doesn’t tell you if it has been decelerating.

Also, seasonal fluctuations can come into play. If a company’s Q1 is seasonally weak and Q4 is strong, it is likely to report a sequential earnings decline. In such cases, growth rates are misleading while judging the true health of a company.

On the other hand, after a whole lot of research and analysis on a company’s financials and initiatives, Wall Street analysts project its earnings. They also take a company’s guidance into consideration when deriving an earnings estimate.

Thus, outperforming that estimate is almost equivalent to beating the company’s own expectation as well as the market perception. And if the margin of earnings surprise is big, it typically drives the stock higher right after the release. Thus, more than anything else, an earnings surprise can push a stock higher.

How to Locate Potential Outperformers?

Now, finding stocks that have the potential to beat on the bottom line is a dream that investors chase but might not always come true. One way of fulfilling it is by looking at the earnings surprise history of a company.

An impressive track in this regard generally acts as a driver in sending a stock higher. It indicates the company’s ability to exceed estimates. And investors generally believe that the company will have the same trick up its sleeve to deliver yet another earning beat in its upcoming release.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/286006/play-eps-surprises-with-these-5-top-stocks

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

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Strong Stocks that Should Be in the News

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