Today marks the start of yet another earnings season. These reporting periods are usually the most important part of the year for growth stock investors — the best stocks get a chance to strut their stuff.
Coming into earnings season locked and loaded with the very best stocks is a big part of how we have been able to put together a strong track record over such a long period of time. When companies show their superior fundamentals by posting positive earnings surprises, buyers tend to flock to the shares — creating a wave of buying pressure that lifts stocks higher.
So as this earnings season begins, I want to help you prepare by finding the stocks in the S&P 500 that have shown the type of earnings momentum and surprise capability that make them the best stocks to own. These are the stocks that have my highest rating of “A” for earnings estimate increases by Wall Street analysts, and a solid history of positive earnings surprises.
CBRE Group (NYSE:CBG) is one such stock. Although the commercial real estate market still faces many hurdles, this company has excelled in the current environment. It offers an across-the-spectrum offering of services, including consulting, valuation, investment management and real estate development. As the CRE markets and have stabilized and in some places begun to recover, the company has seen profits take off and posted earnings surprises in three of the past four quarters. The stock was just upgraded to an overall “A” by Portfolio Grader and should be a solid holding through earnings season.
Goldman Sachs (NYSE:GS) is another stock that just keeps delighting investors. The financial services giant dominates many aspects of the industry and is consistently among the leaders in investment banking and trading profits. The stock has an overall grade of “B” — a buy rating — but even better is the “A” for analyst estimate revisions and earnings surprises. As it has become more apparent that Goldman has once again dominated its competition, nine analysts have raised their estimates in the past week alone. I believe the company could post its fifth consecutive positive earnings surprise on April 16.
Coming into earnings season it is important to own those stocks that are most likely to surpass the expectations of analysts and attract the attention (and dollars) of traders and investors. These two stocks can help you start building a best-of-the-best earnings season portfolio.
Louis Navellier is the editor of Blue Chip Growth.