19 Surprising Stocks With a History of Earnings Surprises

Positive earnings surprises – when profits beat consensus analyst estimates – can have a huge impact on a company’s share price.

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Positive earnings surprises – when profits beat consensus analyst estimates – can have a huge impact on a company’s share price. These surprises show that management can both manage and exceed expectations, not to mention “beats” often lead to share-price gains as investors realize Wall Street might be underappreciating these overachievers.

For instance, a FactSet Research study examining Standard & Poor’s 500-stock index components from Q4 2008 to Q1 2018 found that companies that posted positive EPS surprises gained 1.24% on average in the four-day window surrounding their earnings announcement.

Far more significant was what earnings surprises portended for long-term performance. Golden Capital and FactSet Research tracked S&P 500 companies over 15 years and found that those that reported positive EPS surprises experienced bigger share price gains than those that had not – even in cases where the stock’s short-term response to positive surprises was minimal. While the S&P 500 more than tripled over the study’s timeline, positive surprisers more than quadrupled.

The lesson: Companies that properly manage expectations and can “beat the Street” regularly tend to provide stronger long-term performance – even if the initial response isn’t strongly bullish.

Here are 19 great stocks that have delivered positive earnings surprises averaging 10% or better over the past four quarters. Many of these stocks are off the beaten path, most of these stocks have generated double-digit annual earnings growth over the past five years, and all produced double-digit EPS gains in their most recent fiscal year.

Data is as of April 22. Average positive EPS surprise and growth data provided by Zacks Investment Research. Average positive EPS surprise data refers to the average across the past four quarters and is provided by Zacks Investment Research. Five-year average annual adjusted EPS growth data provided by Seeking Alpha.

Lisa Springer
Contributing Writer, Kiplinger.com

Lisa currently serves as an equity research analyst for Singular Research covering small-cap healthcare, medical device and broadcast media stocks.