The First Cut: Positive Surprises With Below-Average P/Es

    by John Bajkowski

    The First Cut: Positive Surprises With Below Average P/Es Splash image

    When the markets are volatile, investors take comfort in stocks announcing better-than-expected earnings. Notably, contrarian investors have observed that positive surprises are even more dramatic events for value-oriented stocks since the surprise often triggers a change (for the better) in the market perception of a company.

    This issue’s First Cut screens for stocks with below-average forward price-earnings ratios (price divided by expected earnings per share) that have reported quarterly earnings that surpassed the consensus forecast—a positive earnings surprise.

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