How to Find Strong Basic Materials Stocks Slated for Positive Earnings Surprises

Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.

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, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction.

The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Pan American Silver (PAAS) holds a Zacks Rank #2 at the moment and its Most Accurate Estimate comes in at $0.13 a share 26 days away from its upcoming earnings release on August 7, 2024.

PAAS has an Earnings ESP figure of 9.35%, which, as explained above, is calculated by taking the percentage difference between the $0.13 Most Accurate Estimate and the Zacks Consensus Estimate of $0.12.

PAAS is part of a big group of Basic Materials stocks that boast a positive ESP, and investors may want to take a look at Southern Copper (SCCO) as well.

Slated to report earnings on August 6, 2024, Southern Copper holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.27 a share 25 days from its next quarterly update.

Southern Copper's Earnings ESP figure currently stands at 9.96% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.16.

PAAS and SCCO's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

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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Pan American Silver Corp. (PAAS) : Free Stock Analysis Report

Southern Copper Corporation (SCCO) : Free Stock Analysis Report

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Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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