CHICAGO, April 12, 2013 /PRNewswire/ -- Stocks in this week's article include: Popular, Inc. (NASDAQ: BPOP), Skechers USA Inc. (NYSE: SKX), Ryland Group Inc. (NYSE: RYL), XL Group plc (NYSE: XL) and Redwood Trust, Inc. (NYSE: RWT). Kevin Matras details a good screen to use before and after a company reports this earnings season.
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Screen of the Week written by Kevin Matras of Zacks Investment Research:
With earnings having just begun, this is a good screen to use both before and after a company reports.
This screen focuses on more than just earnings surprises, but instead goes over the importance of both earnings surprises and sales surprises, and why as an investor you should care so much about them.
A surprise is more than just a snapshot of an extra few dollars and cents a company made or lost in that one period. Instead, it's a glimpse into what a company's earnings could be, or should be, in the future.
And when these surprises occur, the market tries to quickly re-price that stock to reflect these changes.
While predicting which companies will surprise or not can be difficult, the benefit of an earnings surprise will typically last for one to three months after a surprise is reported.
So you can get in after a company reports a surprise, or you can try and find companies that are more likely to report a surprise, and get in ahead of time.
The screen I'm running today starts off with:
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