We are in the new year and about to begin another first quarterly earnings cycle.

All large brokerages employ analysts to keep track of stock growth. Their job is to pick future winners and losers so they can recommend buying or selling a particular stock. Besides other factors, the biggest single factor in this is the earnings of the company. Earnings reflect the quality of the company’s management, the quality of their product or service and the company overall market share relative to its competitor. The estimated future earnings reflect the growth potential that the analysts anticipate for the stock out into the future.

If you pick the stocks you are interested in, you should keep a close watch on these estimates as stocks should show increased earnings going into the future. And ideally it would show a progression in earnings over the past year. Even if a stock is losing money for now, it is important to have an earnings progression that the company is losing less money each quarter and has a viable plan for future profits.

There is another number that sometimes has an effect on a stock. This is often referred as “whisper number”, it is an unofficial estimate of earnings that is usually different from what the average analysts estimate. For example, 10 analysts show 10 different estimates for a quarter.

The consensus is the median of all those estimates. Very frequently, the whisper number is the highest of all those analysts’ projections. This comes into play sometimes when a stock, for example, reports 20 cents per share of earnings, which is 1 cent above the consensus, but the stock sells off because the highest single estimate was 22 cents. This is known as missing the whisper number, and quite often that means a downward move for that stock.

The importance of earnings cannot be over emphasized. It is probably the single most important factor influencing the rise and fall of a stock’s value. Beating the analyst’s estimates can cause a stock to gap up and missing them often cause the stock to gap down significantly. The bigger the hit or miss, the bigger the move in the stock price. Always be aware of the upcoming earning dates for any stock you trade, as one of the backbone of your research.

In 2006, a heady cocktail of rapidly emerging markets, floods of private equity and hedge fund money and buoyant CEO confidence created an environment so fertile that mergers surpassed all records and this pushed a number of stocks upward. Now many deal makers are asking — can it get any better? Investment bankers reaped many of the benefits of the deal boom, but they are hardly the only ones. Law firms who advise in a large number of mega deals, such as Skadden Arps Slate Meagher and Flom and Sullivan & Cromwell, have plenty of reasons to hope the good times will keep on rolling. Globally, there were $3.79 trillion worth of deals last year, up 38 percent from 2005, according to data from Thomson Financial.

The New York Times reports that many bankers, perhaps not surprisingly, insist the boom is not a bubble. After all, deals during this boom have been happening throughout many industries, not concentrated in just telecommunications and new media as they were in 2000. They are being financed by fast-growing cash flows and forgiving capital markets and not overpriced stocks thus 2007 gives us confidence in a good beginning.

(Mohammed Habeebulla is management and investment consultant.)