Yahoo Finance Why Investors Need to Take Advantage of These 2 Industrial Products Stocks Now
Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.
We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.
2 Stocks to Add to Your Watchlist
The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction.
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. A.O. Smith (AOS) earns a Zacks Rank #2 right now and its Most Accurate Estimate sits at $1.01 a share, just nine days from its upcoming earnings release on April 25, 2024.
By taking the percentage difference between the $1.01 Most Accurate Estimate and the $0.99 Zacks Consensus Estimate, A.O. Smith has an Earnings ESP of 1.87%.
AOS is part of a big group of Industrial Products stocks that boast a positive ESP, and investors may want to take a look at Parker-Hannifin (PH) as well.
Parker-Hannifin is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on May 2, 2024. PH's Most Accurate Estimate sits at $6.18 a share 16 days from its next earnings release.
Parker-Hannifin's Earnings ESP figure currently stands at 1.35% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $6.10.
AOS and PH's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.
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 >>
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A. O. Smith Corporation (AOS) : Free Stock Analysis Report
Parker-Hannifin Corporation (PH) : Free Stock Analysis Report
