For Immediate Release
Chicago, IL – October 21, 2016 - Stocks in this week’s article include: Lattice Semiconductor Corporation (NASDAQ:LSCC –Free Report),NVIDIA Corporation (NASDAQ:NVDA) (NASDAQ:NVDA –Free Report),Murphy Oil Corporation (NYSE:MUR) (NYSE:MUR –Free Report),Inventure Foods, Inc. (NASDAQ:SNAK –Free Report) and Alexandria Real Estate Equities, Inc. (NYSE:ARE – Free Report).
Screen of the Week of Zacks Investment Research:
5 Stocks with the Power of Earnings Acceleration
Take a company’s revenues over a given period of time, subtract the cost of production and you will have its earnings! Right from the top brass to research analysts, earnings growth captivates all. This is because upbeat earnings serve as the indicator of a company’s profitability. It also more often than not leads to an uptick in the share price.
Studies, however, have shown that a majority of successful stocks had seen acceleration in earnings before a positive stock price movement. Hence, earnings acceleration works even better in lifting the stock price.
Future Outperformers
Basically, earnings acceleration is the incremental growth in earnings of a company. 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 referred to as earnings acceleration.
Earnings acceleration helps spot stocks that haven’t caught the attention of investors yet, which once secured will invariably lead to an uptick in the share price. This is because earnings acceleration considers both direction and magnitude of growth rates. However, if you pick stocks just on the basis of earnings growth then you are paying for something that has already been reflected in the stock price.
Increase in the percentage of earnings growth convinces us about the fundamental soundness of the company. A sideways percentage of earnings growth, on the other hand, indicates a period of consolidation or slowdown. If the earnings growth percentage moderates, share prices are more likely to decline.
This is the reason why earnings acceleration should be viewed as a key metric for share price outperformance.
Screening Parameters :
Let’s find out stocks for which the last two quarter-over-quarter percentage EPS growth rates are more than the growth rates of the previous periods. The projected quarter-over-quarter percentage EPS growth rates are also expected to be higher than the previous periods’ growth rates.
EPS % Projected Growth (Q1)/(Q0) greater than EPS % Growth (Q0)/(Q-1) : The projected growth rate for the current quarter (Q1) over the completed quarter (Q0) has to be greater than the growth rate from the completed quarter (Q0) over one quarter ago (Q-1).
EPS % Growth (Q0)/(Q-1) greater than EPS % Growth (Q-1)/(Q-2) : The growth rate for the completed quarter (Q0) over one quarter ago (Q-1) has to be greater than the growth rate from one quarter ago (Q-1) over two quarters ago (Q-2).
EPS % Growth (Q-1)/(Q-2) greater than EPS % Growth (Q-2)/(Q-3) : The growth rate from one quarter ago (Q-1) over two quarters ago (Q-2) has to be greater than the growth rate from two quarters ago (Q-2) over three quarters ago (Q-3).
In addition to this, we have added the following parameters:
Current Price greater than or equal to $5 : This screens out the low-priced stocks.
Average 20-day volume greater than or equal to 50,000 : High trading volume implies that the stocks have adequate liquidity.
The above criteria narrowed down the universe of around 7,713 stocks to only 11. Here are the top five stocks:
Lattice Semiconductor Corporation (NASDAQ:LSCC – Free Report), together with its subsidiaries, develops and sells semiconductor devices in Asia, Europe and the Americas. The company’s projected earnings growth rate for the current quarter and current year are 150% and 130.4%, respectively.
NVIDIA Corporation (NASDAQ:NVDA – Free Report) operates as a visual computing company worldwide. It functions under two segments, GPU and Tegra Processor. The company’s projected earnings growth rate for the current quarter and current year are 40.42% and 71.5%, respectively.
Murphy Oil Corporation (NYSE:MUR – Free Report) operates as an oil and gas exploration and production company worldwide. It explores and produces crude oil, natural gas and natural gas liquids. The company’s projected earnings growth rate for the current quarter and current year are pegged at a respective 70.04% and 57.7%.
Inventure Foods, Inc. (NASDAQ:SNAK – Free Report) manufactures and markets healthy/natural and indulgent specialty snack food products in the United States and internationally. The company’s projected earnings growth rate for the current quarter and current year are 164% and 160%, respectively.
Alexandria Real Estate Equities, Inc. (NYSE:ARE – Free Report) is a real estate investment trust that engages in the ownership, operation, management, development, acquisition and redevelopment of properties for the life sciences industry. The company’s projected earnings growth rate for the current quarter and current year stands at a respective 3.91% and 5.2%.
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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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LATTICE SEMICON (LSCC): Free Stock Analysis Report
NVIDIA CORP (NVDA): Free Stock Analysis Report
MURPHY OIL (MUR): Free Stock Analysis Report
INVENTURE FOODS (SNAK): Free Stock Analysis Report
ALEXANDRIA REAL (ARE): Free Stock Analysis Report
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