What are we looking for?
Strong earnings momentum in the Canadian materials sector.
More about today's screen
Wednesday, we looked at what sectors in North America have the strongest earnings momentum as defined by rising earnings estimates. The material sector came away the strongest, so today we'll look at individual stocks in the sector.
We'll use StarMine again today. It is a Thomson Reuters service that gathers earnings estimate data from analysts. StarMine measures earnings-revision momentum, which is how much earnings estimates have risen or fallen. We're looking at earnings estimate revisions over the past 30 and 60 days for the next quarter, next 12 months and two years out.
We'll restrict the screen to Canadian mid- and large-cap materials names. We'll sort the results by stocks that have over the past two months seen their earnings revised higher for the next 12 months.
What did we find out?
The list is dominated by many precious metals companies.
Take a look at the last column, which shows the "SmartEstimate" for the next 12 months. The SmartEstimate takes into account only analysts who have the most timely and accurate earnings estimate history. In other words, the SmartEstimate puts the most weight on the most accurate analysts.
Many of these companies have huge expectations for profit increases – on top of large profit increases in the past four quarters.