For Immediate Release
Chicago, IL - May 10, 2018 - Stocks in this week's article Insight Enterprises, Inc.NSIT , PetMed Express, Inc.PETS , Avery Dennison CorporationAVY and TriplePoint Venture Growth BDC Corp.TPVG .
4 Top Stocks to Buy for Solid Earnings Acceleration
Consistent earnings growth enthralls almost everyone, right from the top brass to research analysts. This is because earnings are a measure of the money a company is making. Take a company's revenues over a given period of time, subtract the cost of production and you will have its earnings!
Positive earnings results are more often than not followed by an uptick in the share price. Earnings acceleration, however, works even better when it comes to lifting the stock price. Studies have shown that a majority of successful stocks had seen acceleration in earnings before an uptick in the stock price.
Finding Future Outperformers
Basically, earnings acceleration is the incremental growth in earnings of a company. In other words, if the rate of a company's quarter-over-quarter earnings growth increases within a stipulated frame of time, it can be referred to as earnings acceleration.
In case of earnings growth, you pay for something that is already reflected in the stock price. But, earnings acceleration helps spot stocks that haven't caught the attention of investors yet, which once secured will invariably lead to a rally in the share price. This is because earnings acceleration considers both direction and magnitude of growth rates.
Increasing percentage of earnings growth means that the company is fundamentally sound and has been on the right track for a considerable period of time. In contrast, a sideways percentage of earnings growth indicates a period of consolidation or slowdown, while a decelerating percentage of earnings growth may at times drag prices down.
This is the reason why earnings acceleration should be viewed as a key metric for share price outperformance.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportPetMed Express, Inc. (PETS): Free Stock Analysis ReportTriplePoint Venture Growth BDC Corp. (TPVG): Free Stock Analysis ReportAvery Dennison Corporation (AVY): Free Stock Analysis ReportInsight Enterprises, Inc. (NSIT): Free Stock Analysis ReportTo read this article on Zacks.com click here.