In a recent article, I wrote about a discovery I learned from Dr. Len Zacks, founder of Zacks Investment Research. He is the one who taught me that positive changes in earnings estimates are the single most influential factor affecting stock prices over the near term. Earnings estimates are changed in one of two ways: The company itself comes out prior to or at their earnings announcement and says, “You know what, it looks like the current quarter is going better than we expected. Sales are so good, were going to have to up our estimates for what we will… Read More
In a recent article, I wrote about a discovery I learned from Dr. Len Zacks, founder of Zacks Investment Research. He is the one who taught me that positive changes in earnings estimates are the single most influential factor affecting stock prices over the near term. Earnings estimates are changed in one of two ways: The company itself comes out prior to or at their earnings announcement and says, “You know what, it looks like the current quarter is going better than we expected. Sales are so good, were going to have to up our estimates for what we will achieve by the end of it.” Or an analyst covering the company, presumably with access to current sales and profit figures, makes the same kind of announcement. —Recommended Link— The Market’s Most SECRETIVE Indicator… Pioneered by a Texas investing firm, with a PROVEN million-dollar track record, the little-known “MP Score” is something outsiders rarely hear about-until now… Get started HERE. When this happens, it creates what we can call a “valuation disconnect.” According to the Efficient Market Theory (EMT), the current price always reflects all current information regarding the company’s forward earning prospects. So when new information arises unexpectedly,… Read More