Did 2012’s Best Stocks Beat Estimates by the Most?

posted in: Earnings, Market Studies | 0

The heart of earnings season is fast approaching, but as someone who likes to value companies on a long term basis, it’s typically difficult to put a quarterly beat or miss into context.  Still, since there are plenty of people out there who live and die by earnings surprises, here’s a look at how much earnings surprises played into the returns of last year’s best performing stocks.

In a quarterly-earnings-obsessed-world perhaps it’s not too surprising that the best performing stocks of 2012 tended to beat analyst estimates and the worst performing ones tended to miss them.  Below the S&P 500 is broken down into quintiles by performance.  The best performing stocks of last year beat estimates by an average of 4% over the course of the year.  The worst performing stocks missed estimates by an average of 5%.
Earnings Estimates Stock Performance