This screen seeks to identify stocks that have experienced recent revisions in the earnings estimates. Specifically, it looks for stocks that have seen one analyst revision in the last week/month, to try to see if there is an analyst moving away from the consensus. This follows research that showed "bold" estimates like this have a significant impact on share price performance. Note: that this screen on its own isn't able to only pull back revisions that are "bold" (moving away from the consensus), as opposed to revisions that are "herding" (moving closer to the consensus). This will need to be done by analysing the actual list of companies produced in more detail. To learn more about this strategy please click here »
Your Next Great Stock: How to Screen the Market for Tomorrow's Top Performers
by Jack Hough
Jack Hough outlined this apporach in his excellent book, "Your Next Great Stock" (see link above). He cites a 2003 paper, "Analyst Forecast Revisions and Market Price Discovery", which found that buying stocks following "bold" estimates increases and selling them short following bold estimate reductions beat the market by 15% a year.
This screen is based on a UK dataset.
It uses the following criteria:
Results are sorted by:
And limited to the first 200 Results
Bold Earnings Revisions Screen Graphical History Returns| Timeframe | Screen Returns | FTSE 100 | Outperformance |
|---|---|---|---|
| 1 week | 2.88% | 1.97% | 0.9% |
| 1 month | 6.25% | 7.46% | -1.2% |
| 3 months | 7.25% | 5.90% | 1.4% |
| 6 months | 16.75% | 17.74% | -1.0% |
| 1 year | 16.02% | 28.25% | -12.2% |
| Since inception | 30.22% | 25.9% | 4.3% |
| Annualised | 20.24% |
Risk| Maximum Drawdown | -13.94% |
| Average No. of Holdings | 15.6 |
| Diversification Level | Good |
Chart based on an equal weighted portfolio of max 25 stocks rebalanced quarterly. Qualifying shares below updated daily. Past performance not indicative of future returns.
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Can't see the share you expect? View this screen as a checklist to find out why.
