Find Strong Stocks Ahead of Q3 Earnings Season with this First Profit Screener

Original post

The market popped on Tuesday as the S&P 500 and the Nasdaq try to fight their way back to their recent records. The Nasdaq finished regular trading about 7% off its September 2 highs. This helps showcase that the early September selloff might have been more of a pullback than a total move out of tech, with the institutions taking home some profits on all the high-flyers.

There clearly could be more selling and volatility, with the election only seven weeks away. But with interest rates pinned near zero for at least the next few years, the equities market could continue to climb as Wall Street looks for returns.

Investors might want to remain on the hunt for stocks to add to their portfolios. And the third quarter earnings season could be the next major catalyst. The big banks don’t start to report until October 20. Yet we have already seen reports from Oracle (ORCL), Adobe (ADBE), and FedEx (FDX) that here at Zacks we count as part of the broader third-quarter tally (also read: Q3 Earnings Season Gets Underway).

Therefore, investors might want to search for stocks that could benefit from a possible strong showing by utilizing our ‘First Profit’ stock screener…

First Profit

The idea is to search for companies that recently reported their first quarterly profit. More specifically, the screen searches for firms that just posted their first profit last quarter, after not posting a profit for at least the previous four quarters.

Finding companies that recently reported their first profits help investors find stocks that can prove to be big winners. These companies may vary widely. Some of the firms might be new, and this recent profit is perhaps the only profit in its short history.

Meanwhile, other companies might have held an impressive and long history of quarterly profitability, but for whatever reason haven’t seen a profit in a while. Therefore, the return to profit could spark a turning point that management had promised or Wall Street had been clamoring for.

The concept is relatively simple: if the trend has been one of improvement, there is a solid chance the trend will continue. This is true whether a company has been profitable, or is just reaching that key inflection point.

And that’s what we are screening for today…

• EPS for the previous 4 Quarters less than or equal to 0

(This means in each of the previous 4 quarters (except the most recently reported quarter) the company has reported earnings of less than or equal to zero, i.e., no profit.)

• EPS for the recently reported quarter greater than 0

(This time, the company reported earnings greater than zero, meaning they finally showed a profit.)

• Current Price greater than or equal to 5

(Stocks that are trading for less than $5 are more speculative.)

The screen is pretty simple, yet powerful. Here are 3 of the nearly 40 stocks that made it through this week’s screen…

Hecla Mining Company (HL)

Overstock.com, Inc. (OSTK)

Fiverr International (FVRR)

Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It’s easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.

Click here to sign up for a free trial to the Research Wizard today.

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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance/.

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Overstock.com, Inc. (OSTK): Free Stock Analysis Report
 
Oracle Corporation (ORCL): Free Stock Analysis Report
 
Hecla Mining Company (HL): Free Stock Analysis Report
 
Fiverr International Lt. (FVRR): Free Stock Analysis Report
 
FedEx Corporation (FDX): Free Stock Analysis Report
 
Adobe Systems Incorporated (ADBE): Free Stock Analysis Report
 
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