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By Jared Levy

President Obama was elected to a second term and equity markets are responding negatively as expected. Although the knee-jerk sell-off may have been partially motivated by politics, earnings growth trends may be the hidden fly in the market's ointment along with fiscal cliff and euro jitters.

Q3 earnings season is about 75% complete and the results have been decidedly weak on average. Total earnings for the S&P 500 companies reported so far are down roughly 2.7% from the same period last year, with 60% of the companies beating already low earnings expectations.

The revenue side of the equation looks a bit grimmer, with total revenue down 2% and only 35% of the corporations reported so far able to beat revenue expectations. Excluding Finance, total earnings and revenue are down 4.5% and 2.5% from the same period last year, respectively.

Expectations for growth are some of the lowest we have seen in years.

While all this seems like a recipe for lower stock prices, the low expectations may leave more room for positive surprise and upside rallies in stocks that still remain relatively inexpensive from a price to earnings perspective. The recent price corrections in many stocks may also help.

Bullish ESP Stocks

Molycorp (MCP) is a Zacks Rank 3 stock with a positive earnings ESP of 1983% for the current quarter (no that's not a typo); This is due to the Zacks Consensus seeing a profit of just 1 cent in Q3 with the most accurate estimate looking for 25 cents.

Molycorp has had a tough year; the stock dropping to just $9.00 per share from an earlier high near $36. The drop can be attributed to flat demand for rare earths and China monopolizing prices.

The pentagon and several companies are also putting pressure on China to help stabilize the market and rare earth prices, which would help rare earth miners. Another boost is that Obama has pledged to support and push for green energy sources, many of which are dependent upon rare earths.

With MCP now below its IPO price, there may be upside for the shares.

Molycorp reports earnings on November 8.

Beazer Homes (BZH) is a Zacks Rank 2 stock with a positive earnings ESP of 13.7% for the current quarter; the Zacks Consensus is for a loss of $1.11.

While this quarter may register a loss for the company, analysts are expecting relative strength in the quarter and a major reduction in losses for 2013.

Homebuilders have been strong and the low-interest rate environment combined with the strength in sales and stability in home prices should help Beazer going into their report.

Beazer reports earnings on November 12.

Five Below Inc. (FIVE) is a Zacks Rank 2 stock with a positive earnings ESP of 114.3% for the current quarter. The Zacks consensus estimate is for Q3 EPS of $0.014, with the most accurate estimate at $0.03. Five Below is a teen and pre-teen retailer offering products all priced at $5 and below.

Retail is one of the sectors that many believe will fare well no matter who took the White House. The fact that FIVE offers less expensive products may position them well for the still recovering consumer.

The fact that the stock is 25% off its highs for the year makes it a bit more attractive.

Five Below reports earnings on December 11.

Read the full analyst report on MCP (email registration required)

Read the full analyst report on FIVE (email registration required)

Read the full analyst report on BZH (email registration required)

Source: Best Earnings ESP Stocks For November 7