Why Investors Need to Take Advantage of These 2 Basic Materials Stocks Now

Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.

The Zacks Earnings ESP, Explained

The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.

With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.

When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest.

Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.

Should You Consider Agnico Eagle Mines?

The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. Agnico Eagle Mines (AEM) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $2.66 a share 14 days away from its upcoming earnings release on February 12, 2026.

Agnico Eagle Mines' Earnings ESP sits at +17.79%, which, as explained above, is calculated by taking the percentage difference between the $2.66 Most Accurate Estimate and the Zacks Consensus Estimate of $2.25. AEM is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

AEM is just one of a large group of Basic Materials stocks with a positive ESP figure. PPG Industries (PPG) is another qualifying stock you may want to consider.

Slated to report earnings on May 5, 2026, PPG Industries holds a #3 (Hold) ranking on the Zacks Rank, and its Most Accurate Estimate is $1.78 a share 96 days from its next quarterly update.

PPG Industries' Earnings ESP figure currently stands at +1.42% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.75.

AEM and PPG's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

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This article originally published on Zacks Investment Research (zacks.com).

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