Why Investors Need to Take Advantage of These 2 Finance Stocks Now

Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.The earnings figure itself is key, of course, 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 and vice versa.Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.The Zacks Earnings ESP, ExplainedThe Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.Should You Consider Skyward Specialty Insurance?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 quickly look at a qualifying stock. Skyward Specialty Insurance (SKWD) holds a #2 (Buy) at the moment and its Most Accurate Estimate comes in at $0.79 a share five days away from its upcoming earnings release on February 25, 2025.SKWD has an Earnings ESP figure of +2.59%, which, as explained above, is calculated by taking the percentage difference between the $0.79 Most Accurate Estimate and the Zacks Consensus Estimate of $0.77. Skyward Specialty Insurance is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.SKWD is just one of a large group of Finance stocks with a positive ESP figure. Reinsurance Group (RGA) is another qualifying stock you may want to consider.Reinsurance Group is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on May 1, 2025. RGA's Most Accurate Estimate sits at $5.59 a share 70 days from its next earnings release.Reinsurance Group's Earnings ESP figure currently stands at +1.36% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $5.51.SKWD and RGA's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.Find Stocks to Buy or Sell Before They're ReportedUse 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 >>Should You Invest in Skyward Specialty Insurance Group, Inc. (SKWD)?Before you invest in Skyward Specialty Insurance Group, Inc. (SKWD), want to know the best stocks to buy for the next 30 days? Check out Zacks Investment Research for our free report on the 7 best stocks to buy.Zacks Investment Research has been committed to providing investors with tools and independent research since 1978. For more than a quarter century, the Zacks Rank stock-rating system has more than doubled the S&P 500 with an average gain of +24.08% per year. (These returns cover a period from January 1, 1988 through May 6, 2024.)Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Skyward Specialty Insurance Group, Inc. (SKWD): Free Stock Analysis Report Reinsurance Group of America, Incorporated (RGA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks