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Chicago, IL – October 20, 2023 – Stocks featured in this week’s article are Nvidia NVDA, Stanley Black & Decker SWK, Lamb Weston LW, General Electric GE and Dutch Brothers Bros.Thank you for reading this post, don't forget to subscribe!
Looking to earn beats? 5 top stocks to play with
It is not surprising that before the earnings season, every investor looks for stocks that can beat market expectations. This is because investors always try to position themselves ahead of time and want to take advantage of stocks that are of high quality.
In this regard, we ran a screener which revealed potential winners based on earning potential.
Why is a positive earnings surprise so important?
Historically, shares of companies with solid quarterly earnings (on a nominal basis) tend to decline if they don’t meet or exceed market expectations. After all, 20% earnings growth (although obviously sounds good) doesn’t tell you whether earnings growth is trending downward.
Apart from this, seasonal fluctuations also occur sometimes. If a company has a seasonally weak Q1 and a strong Q4, it is likely to report a sequential earnings decline. In such cases, the growth rate is misleading when assessing the actual health of a company.
On the other hand, after much brainstorming and analysis on the financial position and initiatives of the companies, Wall Street analysts have estimated the earnings of the companies. In effect they combine their insights and the company’s guidance when forecasting earnings.
Thus, outperforming that estimate is equivalent to the company beating its own expectation as well as the market’s perception. And if the earnings surprise margin is large, it usually drives the stock higher right after the release. Thus, more than anything else, an earnings surprise can push a stock higher.
How to find stocks that can outperform?
Now, finding stocks that have the potential to reach lower levels may be an investors’ dream but is not an easy task. One way to do this is to look at a company’s amazing earnings history.
An impressive track in this regard usually acts as a catalyst in sending the stock higher. This shows the company’s ability to beat estimates. And investors generally assume the company will apply the same secret sauce to another earnings beat in its next release.
Here are five of the 15 stocks:
Nvidia: The Zacks Rank #1 company is a worldwide leader in visual computing technologies and the inventor of the graphics processing unit, or GPU. you can see The full list of today’s Zacks #1 Rank stocks here,
NVDA’s average earnings surprise for the last four quarters is 9.79%.
stanley black and decker: Zacks Rank #1 company manufactures and provides tools (power and hand tools) and related accessories, engineered fastening systems and many other goods and services.
SWK’s average earnings surprise for the last four quarters is 47.18%.
Lamb Weston: The Zacks Rank #1 company is a leading global manufacturer, marketer and distributor of value-added frozen potato products, particularly French fries, and offers a line of appetizers.
LW’s average earnings surprise for the last four quarters is 46.16%.
general Electric: Zacks Rank #2 is popular for its Leap aircraft engines, heavy-duty gas turbines, Haliade-X and Cypress wind turbines and health care solutions.
GE’s average earnings surprise for the last four quarters is 35.43%.
dutch brothers: The Zacks Rank #2 company is an operator and franchisor of drive-thru shops that focus on serving high-quality, hand-crafted beverages with unmatched speed and superior service.
BROS’s average earnings surprise for the last four quarters is 44.64%.
You can get the rest of the stocks on this list by signing up for your 2-week free trial to the Research Wizard now and start using this screen in your trading. Moreover, you can also create your own strategies and test them before taking the investment risk.
The Research Wizard is a great place to start. It is easy to use. Everything is in simple language. And it is very convenient. Start your Research Wizard trial today. And the next time you read an economic report, open the Research Wizard, plug in your searches, and see what gems pop up.
Click here to sign up for a free trial of Research Wizard today,
For the remainder of this Screen of the Week article, please visit Zacks.com: https://www.zacks.com/stock/news/2168827/looking-for-earnings-Beat-5-top-stocks-to-play
Disclosure: Zacks Investment Research officers, directors and/or employees may own or sell short securities and/or have long and/or short positions in the options mentioned in this material. An affiliated investment advisory firm may own or sell short securities and/or hold long and/or short positions in the options mentioned in this material.
Disclosure: Information about the performance of Zacks’ portfolios and strategies is available at: https://www.zacks.com/performance,
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