Earnings are an important indicator of stock price appreciation.
In general, if you expect to earn 10% on your stock investments, the stock you choose should have their earning grow at 10% or more. Certainly there are exceptions. Buying a stock because of some short term news event, a new technology that is being developed, or a rumored merger are all exceptions. But over the long run, you should select companies for stock purchase that have a steady earnings growth so they will tend to rise in stock price in line with that earnings expectation.
When company selections are made for long stocks or married puts, we generally screen for companies that have good earnings growth. On the PowerOptions site the parameter we like to display and search by for earning growth is %EPSG. %EPSG is and abbreviation for % Earnings Per Share Growth. If %EPSG is not displayed in your search results, add that column to the report using the blue “Choose Columns” button above the search report.
To add a column, select from the search report:
- Logon to PowerOptions, hover your mouse over the strategy tab for your strategy of interest and move the mouse to click Search.
- Click the Choose Columns button
- Click “%EPSG” under Stock Related Columns
- Click “Submit and Save Columns” at the bottom right of the page
- The new column added will appear on the right of the report by default, but can be moved to any position
Sort your search results by the most important data.
If you feel earnings are an important parameter for your stock purchase selections, sort the report listing using the %EPSG parameter. You should generally sort the report selections by the parameter you feel is most important to your trading strategy.
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Searching for stocks with strong earnings growth.
Using weekly call options and weekly put options for stock earnings