More than 70 percent of reports this earnings season have exceeded analysts' estimates, setting up a potential winning trade among those names with strong track records.
On average, fourth-quarter earnings among the companies that have reported are 3 percent above expectations, but flat on a year-over-year basis, according to Thomson Reuters. Excluding the energy sector, earnings growth stands at 2 percent.
Similarly, revenue figures have come in line with estimates, but declined 2 percent from the same period last year.
With more than a fifth of the S&P 500 companies set to report this week, traders everywhere are gearing up for a potential post-earnings surge among certain names.
While betting on stocks ahead of earnings is often a difficult trade, investors tend to look at historical data to make assessments about the future.
Of course, the low bar set by analysts may also help.