For Immediate Release
Chicago, IL – May 31, 2017 - Stocks in this week’s article include Ulta Beauty Inc (NASDAQ: ULTA – Free Report ), Intuit Inc (NASDAQ:INTU). (NASDAQ: INTU – Free Report ), Heico Corp (NYSE: HEI – Free Report ), Morgan Stanley (NYSE:MS) (NYSE: MS – Free Report ) and Ingersoll-Rand (NYSE: IR – Free Report ).
Screen of the Week of Zacks Investment Research:
Looking for Firms with Solid Earnings Growth? 5 Top Buys
Whether it is a fledgling company or a renowned corporation, unswerving earnings growth is the highest priority for the top brass of any organization. And why not? If the company doesn’t make money, it won’t last over the long haul. Consider a company’s revenues over a given period of time, subtract the cost of production and you have earnings.
This metric is also considered the most significant 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 of earnings play a vital role in determining share price movement.
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 historical earnings growth and are also seeing a rise in quarterly and annual earnings estimates.
The Winning Strategy
In order to shortlist stocks that have striking earnings growth and positive estimate revisions, we added the following parameters:
Zacks Rank equal to 2 (Only Zacks' '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.) You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
5-Year Historical EPS Growth (%) greater than X-Industry (Stocks that possess strong EPS growth history.)
% Change EPS F(0)/F(-1) greater than or equal to 5 (Companies that witnessed year-over-year earnings growth rate 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 7,893 stocks to only five. Here are the stocks:
Ulta Beauty Inc (NASDAQ:ULTA – Free Report ) is a holding company for the Ulta Beauty group of companies. The company is a beauty retailer. The company’s estimated earnings growth rate for this year is 24.8%, more than the Retail - Miscellaneous industry’s expected gain of 11.8%.
Intuit Inc. (NASDAQ:INTU – Free Report ) is a provider of business and financial management solutions for small businesses, consumers and accounting professionals. The company’s estimated earnings growth rate for this year is 13.1%, more than the Computer - Software industry’s expected gain of 8.7%.
Heico Corp (NYSE:HEI – Free Report ) manufactures Federal Aviation Administration (FAA)-approved jet engine and aircraft component replacement parts. The company’s estimated earnings growth rate for this year is 11.5%, more than the Aerospace - Defense Equipment industry’s expected gain of 1%.
Morgan Stanley (NYSE:MS – Free Report ) is a financial holding company. The company’s segments include Institutional Securities, Wealth Management and Investment Management. The company’s estimated earnings growth rate for this year is 18.6%, more than the Financial - Investment Bank industry’s expected gain of 10%.
Ingersoll-Rand (NYSE:IR – Free Report ) provides products, services and solutions to improve the quality and comfort of air in homes and buildings, transport and protect food and perishables. The company, which belongs to the Manufacturing - General Industrial industry, is expected to give a solid return of 9.3% this year.
You can get the rest of the stocks on this list by signing 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.
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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.
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Ulta Beauty Inc. (ULTA): Free Stock Analysis Report
Heico Corporation (HEI): Free Stock Analysis Report
Morgan Stanley (MS): Free Stock Analysis Report
Ingersoll-Rand PLC (Ireland) (IR): Free Stock Analysis Report
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