How to Find Strong Basic Materials Stocks Slated for Positive Earnings Surprises
Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
The earnings figure itself is key, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb even higher.
2 Stocks to Add to Your Watchlist
The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.
The final step today is to look at a stock that meets our ESP qualifications. Southern Copper (SCCO) earns a Zacks Rank #3 29 days from its next quarterly earnings release on August 6, 2024, and its Most Accurate Estimate comes in at $1.28 a share.
By taking the percentage difference between the $1.28 Most Accurate Estimate and the $1.16 Zacks Consensus Estimate, Southern Copper has an Earnings ESP of 10.35%.
SCCO is just one of a large group of Basic Materials stocks with a positive ESP figure. HudBay Minerals (HBM) is another qualifying stock you may want to consider.
HudBay Minerals is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on August 13, 2024. HBM's Most Accurate Estimate sits at $0.15 a share 36 days from its next earnings release.
The Zacks Consensus Estimate for HudBay Minerals is $0.11, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 32.63%.
Because both stocks hold a positive Earnings ESP, SCCO and HBM could potentially post earnings beats in their next reports.
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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Southern Copper Corporation (SCCO) : Free Stock Analysis Report
HudBay Minerals Inc (HBM) : Free Stock Analysis Report