Why investors should buy these 2 basic materials stocks now

Investors on Wall Street rely heavily on quarterly financial reports to get a sense of a company's performance and future prospects. Profitability is a key performance indicator (KPI) among many others.  

Although earnings reports are crucial, the relative performance of a company's bottom line relative to expectations can have an even greater impact on stock prices, particularly in the short term. Since this is the case, investors may choose to capitalize on these unexpected profits.  

Two Companies to Keep an Eye On The most recent analyst earnings revisions are used by the Zacks Expected Surprise Prediction (ESP), which is designed to be more accurate than projections made weeks or months before to the actual announcement date.  

The reasoning is simple: analysts with more time to gather information are more likely to have accurate profit forecasts provided closer to the report. Remembering this, the Expected Surprise Prediction weighs the most current Most Accurate Estimate against the Zacks Consensus Estimate as a whole. The ESP figure is given by the percentage difference.  

Looking at a stock that qualifies as an ESP is the last thing we need to do today. Six days before its next quarterly results announcement on April 22, 2024, Nucor (NUE) receives a Zacks Rank #3. The Most Accurate Estimate for the company is $3.64 per share.  

The Earnings ESP for NUE is 0.64%, which is determined by subtracting the Zacks Consensus Estimate of $3.62 from the Most Accurate Estimate of $3.64, as mentioned above. Basic Materials stocks with positive ESP figures are quite numerous, and NUE is simply one of them. You might also want to think about buying Dow Inc. (DOW), another suitable stock.  

Dow Inc. is preparing to announce its earnings on April 25, 2024, and it is a company that has a Zacks Rank #3, meaning it is a hold. The most recent earnings report is nine days away, and the Most Accurate Estimate for DOW is $0.48 per share.

When comparing Dow Inc.'s Most Accurate Estimate with its Zacks Consensus Estimate of $0.47, the resulting Earnings ESP figure is 2.28%. Both NUE and DOW have a positive Earnings ESP, thus it's possible that they will outperform earnings expectations in their next releases.  

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