How to Spot Basic Material Stocks Poised for Earnings Surprises

Investors seeking to boost their portfolios might want to hone in on a company's quarterly earnings, a crucial influence on stock prices. While investors have no sway over interest rates, earnings outcomes are where they can place their bets. Consistently outperforming expectations can lead to stock appreciation, while disappointing results may result in declines. To surpass the investment game, investors often keep an ear to the ground for 'earnings whispers' - hints of companies likely to exceed their earnings forecasts. This practice, although common, is far from simple.

The Role of Zacks Earnings ESP in Forecasting Earnings

A proven strategy to predict earnings surprises involves the Zacks Earnings ESP (Expected Surprise Prediction) tool. It relies on the freshest analyst earnings revisions, assuming that recent estimates are typically more precise as they are made with the latest information available. The ESP compares the Most Accurate Estimate from analysts with the Zacks Consensus Estimate. When merged with a positive Zacks Rank, statistics show that this combination can signal a positive earnings surprise effectively, with impressive historical returns.

Zacks Rank and Earnings ESP: A Winning Combination

Understanding the stock rankings provided by Zacks is pivotal. A #3 (Hold) rank predicts average market performance, whereas #2 (Buy) and #1 (Strong Buy) ranks indicate a higher potential to outperform the market. The Zacks Rank weaves into the Earnings ESP metric to pinpoint companies that are likely to surpass their upcoming earnings estimates, potentially boosting their stock price.

For instance, Agnico Eagle Mines (AEM) is on the radar with its positive Earnings ESP indicating that it might beat earnings estimates three days from now. Similarly, Kinross Gold (KGC) is another basic materials stock with a positive Earnings ESP, suggesting that an earnings surprise could be on the horizon for its next report. Both stocks, like many others in the Basic Materials sector, demonstrate that having a positive Earnings ESP and a favorable Zacks Rank could be the key to identifying potential earnings beats before they are announced.

Conclusion: The Power of Positive Earnings ESP

The Zacks Earnings ESP tool can be a valuable resource for investors looking to find stocks that may offer a positive earnings surprise and consequently, a favorable stock price movement. As earnings season approaches, paying attention to this tool could reveal stocks like AEM and KGC, which might beat their earnings estimates and provide fruitful investment opportunities.

stocks, earnings, analysis