January 2006
Beginner
416 pages
8h 7m
English
Consensus earnings forecast trends are even more significant than the forecasts themselves.
The forecast trend is the current forecast for a period, say the current fiscal year, compared to forecasts for the same period one, two, or three months ago. A positive trend in forecasts tells you that analysts are becoming increasingly optimistic about the company’s prospects, and a positive earnings surprise is likely. Conversely, a negative trend raises the specter of further forecast reductions and a negative surprise at report time.
The best value candidates will show flat or negative forecast trends. Positive forecast trends signal increasing enthusiasm, which means that it’s probably too late for value investors. ...
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