Look for companies for which analysts are raising estimates. Quarterly as well as current fiscal year estimates should be trending higher; the bigger the estimate revisions, the better. At the very least, I like to see the current fiscal year or the next year’s estimates trending higher from 30 days earlier; if both are trending higher, that is even better. Although I won’t necessarily disqualify a stock as a buy candidate if it lacks upward earnings revisions, large downward estimate revisions are definitely a red flag.
