Picking a winning stock requires doing some homework. Researching stock history and determining the earning per share growth (EPS) opportunity can give a great deal of insight into the health of the stock and its potential.
The EPS rate can be compared year over year to highlight possible trends and determine the likelihood the stock will perform in a predictable manner. The best indicators are measured over a five-year period. The EPS number can be compared to other similar stocks for variance and comparison. Investors will also want to compare their stock’s EPS number with a stock on the Investor’s Business Daily’s table. Stocks with EPS ratings at or above 90 have earnings potential that are in the top 10 percent.
The EPS rating isn’t only about picking the right stock at the right time; it’s also about getting rid of underperforming stocks. Jettisoning poor stocks can help turn a profit or maximizing a portfolio’s potential.
Using EPS Rating To Determine Stocks To Keep
- Analysts say Danaher Corporation (NYSE:DHR) is recommended at level 2. The stock increased by 2.37 percent over the last five trades, and it has declined -30.14 percent from the reported 52-week high stock value. It has an EPS of 5.2 percent year over year, and it showed tremendously high EPS growth of 26.3 percent over five years.
- Kimco Realty Corp (NYSE: KIM) has been trading at -12.63 below its 52-week best. Over the last 5-Year EPS measuring period, the stock stands at 47.9 percent and boast a healthy earnings growth of 384.6% year over year. KIM stock has a 5-day performance of 2.39 percent, and analysts’ recommendation is a mean of 2.5.
- American Express Company (NYSE: AXP) has shares showing a high EPS potential of 29.4 percent over the last five years. The financial company has earnings growth of 11.3 percent year over year. Analysts recommend the stock with a mean of 2.5. The stock is currently trading at -15.67 under its highest 52 value. It’s trading at 2.47% over the last five trades.
Using EPS Rating to Determine When to Jettison A Stock
- Alcoa Inc (NYSE: AA) has experienced a noticeable price drop in the last four weeks. Additionally, there are negative earnings estimates for the current quarter moving into the remnant of the year. The stock has experienced several days of poor trading lately, and the prices of shares have dropped 12.0% in the past month.