For Immediate Release
Chicago, IL - January 21, 2019- Stocks in this week's article include Lululemon Athletica Inc. LULU , The Estée Lauder Companies Inc. EL , Ollie's Bargain Outlet Holdings, Inc. OLLI and Darden Restaurants, Inc. DRI . Kevin Matras screens for companies showing their 'first' profit and explains why they are ones to watch.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
4 of the Best Stocks to Buy for Earnings Growth
Take a company's revenues over a given period of time, subtract the cost of production and you will have earnings. Earnings growth draws the attention of almost everyone, right from the top brass to research analysts. And why not? If the company doesn't make money, it won't survive the test of time.
This metric is also considered a key variable in influencing the share price. Better-than-expected earnings performances normally lead to a rally in the share price. However, in addition to actual earnings, expectations o f earnings play a significant role in influencing the price of a stock.
Earnings Estimates Determine Share Prices
We have often seen a decline in the stock price despite earnings growth and a rally in the price following an earnings decline. This is largely a result of a company's earnings failing to meet market expectations.
Earnings estimates embody analysts' opinions of factors such as sales growth, product demand, competitive industry environment, profit margins and cost control. Thus, earnings estimates serve as a valuable tool while making investment decisions. Earnings estimates also help analysts assess the cash flow to determine the fair value of a firm.
Investors, thus, should be on the lookout for stocks that are ready to make a big move. Hence, it is important for investors to buy stocks that have witnessed historical earnings growth and are also seeing a rise in quarterly and annual earnings estimates.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/348322/4-of-the-best-stocks-to-buy-for-earnings-growth
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