The next thing I look for is that the analysts are increasing their expectations for the coming year’s earnings. I call this EPS Trends. The price of the stock goes up as the analysts raise their estimates.
For example, Mega Broker was looking for $1.00 per share earnings in the coming year. But now they look for $1.10. In effect, they just made the stock 10% cheaper. So more people buy the stock because it is cheaper and the stock price rises.
This is the basis for the Zack’s rating system and they consistently outperform the market.
Here’s how I can help you learn the exact rules for finding stocks like the ones that were top performers for the 2010s: