Yahoo Finance 5 Top Stocks Worth a Buy for Solid Earnings Growth
Irrespective of whether it is a start-up or a well-known 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 the share price. But, expectations of earnings play a striking role.
Nonetheless, stocks such as Volvo VLVLY, Dycom Industries DY, NVIDIA NVDA, Sitio Royalties Corp. STR and Primerica PRI are currently exhibiting superb earnings growth.
Earnings Estimates & Share Price Movements
Frequently, we have seen a decline in the stock price despite earnings growth and a rally in price following an earnings decline. This is largely the result of a company’s earnings failing to meet market expectations.
Earnings estimates embody analysts’ opinions on 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.
Thus, investors should be on the lookout for stocks ready to make a big move. Hence, investors need to buy stocks with historical earnings growth and are seeing a rise in quarterly and annual earnings estimates.
Screening Measures:
To shortlist stocks that have striking earnings growth and positive estimate revisions, we have added 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 down the universe of around 7,839 stocks to only 5. Here are the stocks:
Volvo is a manufacturer of trucks, buses, and construction equipment. The company has a Zacks Rank #2 (Buy). VLVLY’s expected earnings growth rate for the next five-year period is 16.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dycom Industries is a specialty contracting firm operating in the telecom industry. The company has a Zacks Rank #2. DY’s expected earnings growth rate for the next five-year period is 23.8%.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. The company has a Zacks Rank #1. NVDA’s expected earnings growth rate for the next five-year period is 30.9%.
Sitio Royalties owns and manages mineral and royalty interests across premium basins. The company has a Zacks Rank #1. STR’s expected earnings growth rate for the next year is 17.8%.
Primerica provides financial products and services. The company has a Zacks Rank #2. PRI’s expected earnings growth rate for the current year is 10.5%.
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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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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Sitio Royalties Corp. (STR) : Free Stock Analysis Report
Primerica, Inc. (PRI) : Free Stock Analysis Report
Dycom Industries, Inc. (DY) : Free Stock Analysis Report
AB Volvo (VLVLY) : Free Stock Analysis Report
