Not surprisingly, before the earnings season, every investor is looking for shares that can overcome market expectations. This is because investors always try to reside in advance and strive to use high quality reserves.
In this regard we did a screen that gave the stock Agco Agco, Reddit Inc. Rddt, Extreme networks Ex. Sofi technology Sofi and Skywest Skyw overcame potential as expected profit winners.
Historically, companies with a solid quarterly earnings (nominal) reserve, if they spend or only meet market expectations. After all, the 20% increase in income (although apparently looks good) does not say whether income growth has shown a slowing trend.
Seasonal fluctuations sometimes occur. If the Q1 companies are seasonally weak and the quarter, a strong, is likely to report a consistent decline in income. In such cases, growth rates mislead the real health of the company.
On the other hand, after many companies’ financial and initiative analysis and analysis, Wall Street analysts from companies. They actually include their insights and the instructions of the company when they receive an estimate of earnings.
Thus, the output that this rating is almost equivalent to both the expectations of the company itself and the market perception. And if the earnings surprise is large, it usually increases the stock above immediately after the release. So, more than anything else, the earnings surprise can increase the shares.
Now the discovery of shares that can overcome the essence can be an investor’s dream, but not an easy job. One way to do so is to look at the story of the company’s surprise.
The impressive track usually acts as a catalyst for sending higher stocks. It shows the company’s ability to surpass the estimates. And investors usually believe that the company will apply the same secret sauce to perform another earning rhythm in another show.
In order to add stock to the list that will probably come up with a wage surprise, we have chosen these basic selection parameters.
Last EPS surprise greater than or equal to 10%: Shares that provide a positive surprise last quarter are again surprised.
Average EPS surprise in the last four quarters over 20%: We lifted the tape to exceed the performance slightly higher, setting the average income surprise for the last four quarters – 20%.
Average EPS surprise in the last two quarters over 20%: This draws attention to the more consistent surprise history and makes another surprise.
In addition, we provide some other criteria that increase the possibility of positive surprises.
Zacks occupies less than 2 or equal to 2: Only companies with Zacks rank no. 1 (Strong Buy) or 2 (buy).
Income larger than zero: As foreseen by our proven model, the shares must have both positive income ESP and Zacks rating no. 1, 2 or 3 to execute income rhythm.
We have added the following parameters to have long -term growth potential and high liquidity of trade:
The next 3-5 years calculated EPS growth (per year) greater than 10%: Strong expected income growth indicates a long -term prospect of promotion growth.
The average volume of 20 days is greater than 100,000: The large volume of trade means that shares have sufficient liquidity.
Many criteria have narrowed the universe from more than 7,700 stocks to only six.
There are five out of six shares here:
Agco: Zacks Ranking no. 1 is the leading manufacturer and distributor of agricultural equipment and related spare parts. You can see A detailed list of today’s Zacks #1 shares;
The average AGCO surprise in the last four quarters is 316.76%.
Reddit Inc.: Zacks Ranking no. 1 Company is a social media and a community -led platform that allows the discovery, conversation and engagement in various interests based on forums. RDDT Stock Zacks rank no. 1
The average RDDT surprise in the last four quarters is 261.89%.
Extreme networks:Zacks Ranking no. 2 The company is the leading new generation of switching solutions that meet the growing needs of local local networks, Internet service providers and content providers.
The average surprise for the last four quarters is 20.63%.
Sofi technology: This is a member of the one -stop -box financial service store that allows members to borrow, save, spend, invest and protect their money using lending and financial services products. Currently, the company occupies the Zacks Rating no. 2.
The average Sofi surprise in the last four quarters is 45.83%.
Skywest: The company acts as a regional airline in the US through its subsidiary Skywest Airlines. Currently, the company occupies Zacks Ranking no. 1
The average Skyw earning surprise in the last four quarters is 21.92%.
You can buy the remaining reserves of this list when you now sign up for your 2 -week free trial version to Research Wizard and start using this screen in your trade. Also, before you take your investment, you can also create your own strategies and try them first.
The survey wizard is a great place to start. It is easy to use. Everything is a simple language. And it’s very intuitive. Start your research wizard investigation today. And the next time you read the economic report, open the research wizard, connect your findings and see what gems are going out.
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Disclosure: Zacks Investment Research officials, directors and / or employees may have or have sold short securities and / or occupied long and short positions in the options mentioned in this material. A related investment advisory company may have or have sold short securities and / or to take long and / or short positions in the options mentioned in this material.
Disclosure: Zacks portfolio and strategies activity activities in the activities of activities can be found: https://www.zacks.com/performance;
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Agco Corporation (Agco): Free Stock Analysis Report
Extreme Networks, Inc. (EXT): Free Stock Analysis Report
Skywest, Inc. (SKYW): A report of free stock analysis
Sofi Technologies, Inc. (Sofi): Free Stock Analysis Report
Reddit Inc. (RDDT): Free Stock Analysis Report
This article was originally published on Zacks Investment Research (zacks.com).
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