For Immediate Release
Chicago, IL – Jan 19, 2018 - Stocks in this week’s article include: Caterpillar Inc. CAT, Crocs Inc. CROX, Pioneer Natural Resources Company PXD, Legg Mason Inc. LM and Intuitive Surgical Inc. ISRG.
Screen of the Week of Zacks Investment Research:
5 Top Stocks Powered by Beat Potential This Earnings Season
Now that Q4 earnings season is knocking at the door, there is no mystery in investors’ hunt for stocks with estimate beating potential. 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.
And that's what we're screening for today…
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/289193/5-top-stocks-powered-by-beat-potential-this-earnings-season
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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.
About Screen of the Week
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Contact: Jim Giaquinto
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Legg Mason, Inc. (LM) : Free Stock Analysis Report
Caterpillar, Inc. (CAT) : Free Stock Analysis Report
Intuitive Surgical, Inc. (ISRG) : Free Stock Analysis Report
Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report
Crocs, Inc. (CROX) : Free Stock Analysis Report
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