August has traditionally been a tough month for Wall Street, with several stocks registering lackluster performances. Hence, it’s judicious for investors to place bets on companies exhibiting superb earnings growth, leading to an uptick in share price.
Irrespective of whether it is a start-up or a celebrated company, earnings growth is the top priority for any organization. This is because if the company doesn’t make money, it won’t survive.
So, what’s earnings growth? Study a company’s revenues over a given period, subtract the production cost, and you have earnings. By the way, this is also considered the most important variable influencing share price. But expectations of earnings play a striking role.
Screening Measures Using Research Wizard:
To shortlist stocks that have striking earnings growth and positive estimate revisions, we analyzed the following parameters:
Zacks Rank less than or equal to 2 (Only Zacks' 'Buys' and 'Strong Buys' are allowed. With the Zacks Rank proving itself to be one of the best rating systems out there, this is a great way to start things off.)
5-Year Historical EPS Growth (%) greater than X-Industry (stocks with a strong EPS growth history).
% Change EPS F(0)/F(-1) greater than or equal to 5 (companies that saw year-over-year earnings growth of 5% or more in the last reported fiscal).
% Change Q1 Estimates over the last 4 weeks greater than zero (stocks that have seen their current quarter earnings estimates revised higher in the last 4 weeks).
% Change F1 Estimates over the last 1 week greater than zero (stocks that have seen their annual earnings estimates revised higher in the last 1 week).
% Change F1 Estimates over the last 4 weeks greater than zero (stocks that have seen their annual earnings estimates revised higher in the last 4 weeks).
The above criteria narrowed the universe of around 7,839 stocks to only 36. Here are the top three stocks:
Globe Life
Globe Life GL is an insurance holding company. The expected earnings growth rate for the current year is 11.3%. GL currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
WisdomTree
WisdomTree, Inc. WT is a financial innovator, offering a well-diversified suite of exchange-traded products, models and solutions. The expected earnings growth rate for the current year is 56.8%. WT currently has a Zacks Rank #2 (Buy).
First Industrial Realty Trust
First Industrial Realty Trust FR is a self-administered and fully integrated industrial real estate company. The expected earnings growth rate for the current year is 6.6%. FR currently has a Zacks Rank #2.
You can sign up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
Disclosure: Officers, directors, and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
