What are we looking for?
Earnings seasons is upon us. Let's look for stocks that are expected to have strong quarters.
Today's search
We'll turn to StarMine for help. StarMine is a service that ranks analysts and provides lots of data about earnings estimates.
We'll use the StarMine Indicator, which ranks stocks from 1 to 100 based on three earnings criteria: 1) StarMine finds the analysts that have predicted surprises in the past and then sees if they are projecting more; 2) Recent increases to earnings estimates by analysts for the current quarter and year; 3) Positive changes in analyst recommendations.
We'll screen Canadian stocks that have a StarMine Indicator at the top of the range, which is greater than 90.
We'll also look for Canadian-listed companies with market caps greater than $250-million and coverage by at least three analysts.
So what did we turn up?
There are a couple columns to zero in on in this table. Look for companies with rising earnings estimates, or in analyst parlance, strong earnings momentum. The market likes companies with rising earnings estimates and often drives these stock prices up. Domtar Corp., First Quantum Minerals Ltd. and European Goldfields Ltd. are worth digging into to find out where their earnings momentum is coming from.
Also look at the column called 'Smart estimate EPS this quarter' and compare it with 'Mean estimate EPS this quarter.' This is where StarMine figures out which analysts have been good at predicting earnings in the past and isolates them in a Smart Estimate. A high Smart Estimate is a hint about which companies might announce a positive earnings surprise. European Goldfields, Industrial Alliance Insurance, Churchill Corp., Sherritt International Corp. First Quantum and Inmet Mining Corp. are worth further research here too.