Zacks.com Featured Highlights Include: Medtronic, STERIS And Enova International
Zacks Investment Research | Mar 22, 2020 09:04PM ET
For Immediate Release
Chicago, IL – March 23, 2020 – Stocks in this week’s article are Medtronic plc (NYSE:MDT) , STERIS plc (NYSE:STE) and Enova International, Inc. (NYSE:ENVA) .
3 Top Stocks to Buy for Earnings Acceleration
Right from the top brass to research analysts, earnings growth interests all. This is because earnings are a measure of the money a company is making. Notably, earnings are essentially revenues that the company generates after deducting the cost of production over a given period of time.
Earnings acceleration, however, works even better when it comes to boosting the stock price. Studies have shown that a majority of stocks had seen acceleration in earnings before a rally in stock price.
Future Outperformers
So, what is earnings acceleration? It is the incremental growth in a company’s earnings per share (EPS). In other words, if the rate of a company’s quarter-over-quarter earnings growth increases within a stipulated frame of time, it can be called earnings acceleration.
In case of earnings growth, you pay for something that is already reflected in the stock price. But, earnings acceleration helps spot stocks that haven’t caught the attention of investors yet, which once secured will invariably lead to a rally in the share price. This is because earnings acceleration considers both direction and magnitude of growth rates.
Increasing percentage of earnings growth means that the company is fundamentally sound and has been on the right track for a considerable period of time. Meanwhile, a sideways percentage of earnings growth indicates a period of consolidation or slowdown, while a decelerating percentage of earnings growth may at times drag prices down.
Hence, earnings acceleration should be viewed as a key metric for share price outperformance.
For the rest of this Screen of the Week article please visit Zacks.com at: Zacks Investment Research
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