Investors looking to play the third-quarter earnings season for gains should take note of stocks with a track record of beating expectations and moving higher. So far, the earnings season has been better than anticipated due to lowered expectations and inflation helping boost sales numbers even with lower volume. Of the roughly 20% of companies that have reported quarterly results so far, 72% have beat expectations, according to FactSet data. Next week will be a big one for the season, with more than 100 S & P 500 components slated to report. Because of this, CNBC Pro set out to find which companies have history of outperforming estimates and trading higher on those results. We used data from Bespoke Investment Group to screen for names reporting next week that beat pre-share earnings estimates at least 80% of the time and then notched an average gain of at least 1% on earnings day. Here are the results: The stock with the largest average gain on earnings day is ServiceNow , a software company scheduled to release its results Oct. 26. The company has an 88% beat rate and an average earnings-day gain of 3.3%. In its last earnings release, the company beat profit expectations but gave a weaker-than-expected guidance. Its CEO, Bill McDermott, also warned that technology companies will be hurt by the strong dollar. So far this year, ServiceNow has shed more than 45% year to date and recently hit a 52-week low, meaning it is trading at a discount. Technology giant Apple , which is slated to report earnings Oct. 27, is also on the list. The company beats earnings expectations 89% of the time, and has an average earnings-day gain of 1.2%, according to Bespoke. JPMorgan recently reiterated its overweight rating on shares of Apple ahead of its earnings report next week. The bank also said that investors remain too focused on the iPhone after reports of potential production cuts have weighed on the stock. “For a year in which investor expectations are ranging from revenue declines in the bear case to modest growth in the bull case, every driver of growth matters,” wrote analyst Samik Chatterjee in a Friday note. One growth area they’re specifically focused on is the new smartwatch. “In that respect, we are taking a look at both the near-term and long-term growth opportunity from the recent move from Apple to enter the premium Smartwatch category; although, with significant room for further premiumization from here on,” they said. Mastercard is another large company that’s included in the list, with a 94% earnings beat rate and average earnings day move of 2%. The financial services firm, which recently added a crypto trading offering for banks, will report results next Friday, Oct. 27. Teledyne has an earnings beat rate of 100%, according to the Bespoke data. The company also usually moves 2% on earnings days. They’re scheduled to report results on Oct. 26.
© heardonwallstreet.com