In January 2020 we published our top ten second quarter earnings surprise candidates based on StarMine predictive analytics models. Of these 19Q4 North American earnings surprise candidates picks, 80% were correct. The StarMine SmartEstimate®  is a weighted average of analyst estimates, with more weight given to more recent estimates and more accurate analysts. Our studies have shown that when the SmartEstimate® differs significantly from the consensus (IBES Mean), the Predicted Surprise accurately predicts the direction of earnings surprises or further revisions 70% of the time. When significant Predicted Surprise for revenue is also present for the period, the accuracy improves to 78%.

The StarMine team has selected five North American companies, using Eikon Screener by Refinitiv, that we expect to beat 19Q4 earnings estimates, based on SmartEstimate® and Predicted Surprise data. Our North American selections for 2019 Q3 positive Predicted Surprises were 100% accurate, which can be viewed here. Historically (since 2011 Q4), our positive Predicted Surprise picks have demonstrated an accuracy rate of about 81.8%, giving investors an edge ahead of earnings announcements. Our North American picks for positive Predicted Surprises in 2019 Q4 are — EOG Resources Inc (EOG.N), Trade Desk Inc (TTD.OQ), First American Financial Corp (FAF.N), Tyson Foods Inc (TSN.N), and

A clear trend has emerged within the energy sector, consistent negative earnings and revenue forecasts for the S&P 500’s oil & gas exploration & production (E&P) sub-industry. The group continues to face a weak pricing environment and is expected to stop the exponential production growth. Exhibit 1: S&P 500 E&P YoY Growth Rates vs. Net Profit Margin Analyst estimates for E&P’s 19Q3 aggregated earnings have fallen 20.1% since July 1 and revenue expectations have come down 9.0%. As a result, the outlook for 19Q3 YoY earnings are down 15.1 percentage points (ppts) to a decline of 39.5% and revenue fell