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5 High-Flying Mid-Cap Stocks You Must Buy Ahead of Q1 Earnings

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We’re in the first big week of this reporting cycle, with over 1,000 companies reporting their financial numbers. Next week will be another big one with 1,600 companies ready to report their results.

As of April 26, 164 companies in the S&P 500 index had released their quarterly financial figures. Total profits for these companies fell 1.2% year-over-year, on revenue up 6.5%. Additionally, 81.1% of companies exceeded profit estimates while 75% exceeded revenue estimates.

Our projection showed total S&P 500 earnings to decline 6.9% year-over-year on revenue up 2.6%, versus a 10% year-over-year decline in earnings on revenue up 1.7%, estimated at the start of the reporting cycle. This will follow a 5.4% year-over-year decline in S&P 500 index earnings on revenue up 5.9% in the fourth quarter of 2022.

Mid Caps in Q1 in a nutshell

Like the three major equity indices, the mdcap-centric S&P 400 index ended in positive territory, rising 3.4% in the first quarter of 2023. inflation, favorable economic data and a reduction in the magnitude of interest rate hikes by the Fed.

Additionally, in his statement from the March FOMC meeting, Fed Chairman Jerome Powell said the rate hike cycle was coming to an end. This has boosted market participants’ confidence in risky assets such as stocks.

Our top picks

We have narrowed our search to five mid-cap stocks (market capitalization >$1B <$10B) that are expected to report Q1 2023 results. These stocks have provided more than 20% returns year to date. 'year.

Each of these stocks carries either a Zacks rank of #1 (strong buy) or 2 (buy) and has a positive ESP gain. You can see the full list of today’s Zacks #1 Rank stocks here. The combination of a favorable Zacks ranking and a possible beating in earnings should push stock prices higher.

Our research shows that for stocks with the combination of a Zacks rank of #3 (Hold) or better and a positive earnings ESP, the probability of an earnings overshoot is as high as 70%. These shares should appreciate after the publication of their results. You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.

The chart below shows the price performance of our five picks over the past quarter.

Image source: Zacks Investment Research

Shake Shack Inc. SHAK is a hamburger fast food restaurant chain. SHAK operates in the United States and internationally. SHAK is one of the largest hamburger chains in the country, offering beef burgers, flat dogs, chicken sandwiches, frozen custard and crinkle cut and other food items.

The company-owned app and web channels allow customers to order food even without going to the restaurant. Shake Shack’s stock price has jumped 30.2% since the start of the year.

Zacks Rank #2 Shake Shack has a +2.3% Earnings ESP. It has an expected earnings growth rate of 93.6% for the current year. The Zacks consensus estimate for current-year earnings has improved 33.3% over the past seven days.

Shake Shack has posted earnings surprises over the past four reported quarters, averaging 39.8%. SHAK is expected to release its results on May 4, before the opening bell.

Wingstop Inc. WING franchises and operates restaurants. WING’s operating segment includes Franchise and Company segments. WING offers classic wings, boneless wings and tenderloins that are cooked to order and hand-prepared in a variety of flavors. Wingstop’s stock price has jumped 44.6% since the start of the year.

Zacks Rank #2 Wingstop has a +2.64% Earnings ESP. He predicts a profit growth rate of 3.2% for the current year. The Zacks consensus estimate for current-year earnings has improved 10.6% over the past 30 days.

Wingstop has recorded earnings surprises in three of the last four reported quarters, averaging 22.7%. WING is expected to release its results on May 3, before the opening bell.

AssetMark Financial Holdings Inc. AMK provides wealth management and technology solutions in the United States. AMK offers an open-architecture product platform, as well as client advice, asset allocation options, practice management, support services and technology for the financial advisor channel.

AMK also provides an integrated technology platform for advisors to access a range of automated processes, including new account opening, portfolio construction, simplified financial planning, client billing, investor reporting, analysis of progress towards objectives and monitoring of client activities; advisory services and an organized investment platform. AssetMark Financial’s share price has climbed 34.7% since the start of the year.

Zacks Rank #2 AssetMark Financial has an ESP on earnings of +1.87%. It has an expected earnings growth rate of 27.1% for the current year. The Zacks consensus estimate for current-year earnings has improved 22.7% over the past 30 days.

AssetMark Financial has recorded earnings surprises over the past four reported quarters, averaging 8%. AMK is expected to release its results on May 3, after the closing bell.

Primerica Inc. PRI provides financial products and services. PRI helps its clients meet their needs for term life insurance, which it underwrites, and for mutual funds, variable annuities and other financial products, which it distributes primarily on behalf of third parties.

PRI’s mission is to serve middle-income families by helping them make informed financial decisions and providing them with a strategy and means to achieve financial independence. PRI sales representatives use its proprietary Financial Needs Analysis, or FNA, tool and educational approach to demonstrate how its products can help customers provide financial protection for their families, save for retirement and manage their debt. Primerica’s share price is up 27.1% year-to-date.

Zacks Rank #1 Primerica has a +0.17% Earnings ESP. It has an expected earnings growth rate of 32.6% for the current year. The Zacks consensus estimate for current-year earnings has improved 2.5% over the past 30 days. Primerica is expected to report results on May 8, after the closing bell.

Certara Inc. CERT provides software products and technology services to customers for biosimulation in drug discovery, preclinical and clinical research, regulatory submissions and market access.

CERT delivers medicines to patients using biosimulation software, technologies and services to transform drug discovery and development. CERT also provides related technology services to guide its clients’ new drugs through the regulatory submission process and into market. Certara’s share price is up 50.2% year-to-date.

Zacks Rank #1 Certara has a +5.41% Earnings ESP. It has an expected earnings growth rate of 15.2% for the current year. The Zacks consensus estimate for current-year earnings has improved 15.2% over the past 60 days. Certara is expected to release its results on May 8, after the closing bell.

Stay on top of upcoming earnings announcements with Zacks Earnings Calendar.

7 best stocks for the next 30 days

Just Released: Experts distill 7 elite stocks from the current Zacks No. 1 Ranking 220 Strong Buys list. They consider these tickers “most likely for early price increases.”

Since 1988, the full list has beaten the market more than 2 times with an average gain of +24.8% per year. So be sure to give your immediate attention to these 7 handpicked ones.

Discover them now >>

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

Primerica, Inc. (PRI): Free Stock Analysis Report

Shake Shack, Inc. (SHAK): Free Stock Analysis Report

Wingstop Inc. (WING): Free Stock Analysis Report

AssetMark Financial Holdings, Inc. (AMK): Free Stock Analysis Report

Certara, Inc. (CERT): Free Inventory Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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