Emerging Markets  >  Earnings Acceleration

Earnings Acceleration

Why Tracking Secular Trends May Help Predict Growth in EM Companies

By Patricia Ribeiro & Nathan Chaudoin - June 2019

Key Takeaways

  • Earnings acceleration drives stock price performance. Academic research supports our belief that changes in operating earnings per share (EPS) have a material effect on stock prices. This relationship has borne out over 45 years’ worth of data spanning bull and bear markets and dramatic shifts in size and style leadership.
  • Inflection points signal opportunities. Our team utilizes a disciplined methodology to identify key inflection points in company earnings that may signal an opportunity to generate superior long-term, risk-adjusted investment performance.
  • Secular trends in emerging markets (EM) create earnings growth potential. Fundamental, bottom-up analysis that considers earnings acceleration can help identify companies positioned to benefit from such trends and themes.
  • Past trends may provide insights. Reviewing how past secular trends played out in emerging markets may suggest how an earnings acceleration philosophy can be applied to building an EM portfolio today.

Our Emerging Markets Equity team believes earnings acceleration—when a company’s EPS are growing at an accelerating rate—represents one of the most important indicators of a stock’s potential to increase in price. Correctly using earnings acceleration to forecast the extent of sustainable improvement may help generate superior investment returns. Employing that process in concert with analyzing and monitoring long-term secular trends can be applied to investing in emerging markets.

Patricia Ribeiro
Patricia Ribeiro
Senior Portfolio Manager
Global Growth Equity
Nathan Chaudoin
Nathan Chaudoin
Senior Client Portfolio Manager
Global Growth Equity

Earnings Acceleration

Market Perspective | June 2019

Download PDF
  • Related Articles
  • More From Author
As countries emerge from lockdown and vaccinations accelerate, we expect continued improvement in growth in the second half.

Outlook: Sequenced Rather Than Synchronized

As countries emerge from lockdown and vaccinations accelerate, we expect continued improvement in growth in the second half.

July 2021

By investing with the intention of helping to advance the Sustainable Development Goals, you can play a critical role in creating a more inclusive society.

U.N. Sustainable Development Goals Present Opportunities in Emerging Markets

By investing with the intention of helping to advance the Sustainable Development Goals, you can play a critical role in creating a more inclusive society.

November 2019

Investing for positive impact continues to evolve. It has quickly become a mainstream way to manage risk and uncover opportunities that traditional financial analysis may fail to capture.

Emerging Markets Sustainable Impact Report

Investing for positive impact continues to evolve. It has quickly become a mainstream way to manage risk and uncover opportunities that traditional financial analysis may fail to capture.

March 2021

    As countries emerge from lockdown and vaccinations accelerate, we expect continued improvement in growth in the second half.

    Outlook: Sequenced Rather Than Synchronized

    As countries emerge from lockdown and vaccinations accelerate, we expect continued improvement in growth in the second half.

    July 2021

    Learn why we believe investors may achieve alpha with impact without compromising solid returns.

    The Importance of SDG Investing in Emerging Markets

    Learn why we believe investors may achieve alpha with impact without compromising solid returns.

    June 2019

    There's a lot of talk about ESG investing. However, few managers have focused on emerging markets—and that's where we see a lot of potential.

    Sustainable Investing in Emerging Markets

    There's a lot of talk about ESG investing. However, few managers have focused on emerging markets—and that's where we see a lot of potential.

    January 2020

      Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

      The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.