Rummaging for Earnings Surprises
With earnings season in full swing, I decided to look at the coming week and see what looks interesting. My definition of "interesting" is not what the absolute results will look like, or even what the year-over-year growth looks like it will be. That sort of data is "in the stocks," and share prices will not react to results that meet expectations. We are looking for names for which the expectations could be wrong, whether positively or negatively. Missing expectations in either direction is the catalyst that can move a stock and generate trading profits.
In order to get down to a manageable universe, let's look at next week's scheduled reports among S&P 500 companies. 126 S&P-listed companies are set to report, which should be a sufficiently rich universe from which to mine ideas. In order to see where consensus is rapidly changing, I checked the first-quarter earnings-per-share estimate as of Thursday night against that same estimate one month earlier. Of our group, four stocks have seen estimates rising more than 10% in the last month, while targets for 14 have declined more than 10%. These names are candidates for either an upside or downside surprise, respectively....113 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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