These 5 Stocks Screen as Alpha Opportunities Through Out 2021 - Morgan Stanley
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Morgan Stanley Quant Strategist, Boris Lerner, highlighted 5 names that offer the opportunity for alpha driven earnings surprises through-out 2021 using the company's Quali-SURE methodology. The companies highlighted include Intel (NASDAQ: INTC), Abbott (NYSE: ABT), Northrop Grumman (NYSE: NOC), Schlumberger Ltd. (NYSE: SLB), and Regions Financial (NYSE: RF). Quali-SURE stands for Quality in Standardized Unexpected Revenue & Earnings and is meant to identify high quality stocks with outsized earnings and revenue surprises versus their sector peers.
The analyst stated "Another strong earnings season is underway as 71% of reporters thus far have
beat on earnings and 58% beat on revenue as of Jan 28, with 18% of the 1500 largest Russell 3000 (i.e. Russell 1500) companies, representing 42% of the market cap, reporting. We see strong top line support for bottom line surprises, with companies beating revenue expectations by 3.7% and earnings by 17.9%". "The company's Quali-SURE series identifies high quality stocks that have delivered outsized earnings and revenue surprises. While both earnings and revenue surprises can offer useful insights into a company's performance in a given quarter, the added layer of earnings quality screening gives further assurance that the fundamentals of a company support the observed surprise."
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