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Saturday, December 15, 2012

Which Stocks Look Ready to Surge and Sink with Earnings Next Week?

Image representing Oracle Corporation as depic...
Image via CrunchBase
Chicago, Dec.15, stock advice .-  Stocks tend to be most volatile around earnings season, when a good or bad report can make or break it. However, a good or even great earnings report doesn't necessarily translate into a huge pop for a stock.

During earnings season, BullMarket.com publishes a comprehensive 25- to 40-page Earnings Preview report for the week ahead each Friday. As a special holiday treat, BullMarket.com is publishing two extra supplemental previews for December.

Over the past year, BullMarket.com used the data it has collected to correctly predict investor reactions for approximately two-third of the stocks it's previewed.

In its latest earnings preview, BullMarket.com looks at several popular stocks, including Oracle (ORCL), Bed Bath & Beyond (BBBY), FedEx (FDX),Research in Motion (RIMM), Nike (NKE), CarMax (KMX), Walgreen (WAG), and Darden Restaurants (DRI).

Here is just a tiny sample of what BullMarket.com wrote about FedEx:
FedEx has beaten analyst EPS estimates six of the past eight quarters, missing the consensus once and meeting it once. Over that period, the stock has risen the next session five of eight quarters. Seasonally, the stock has risen twice in the last four years. ...

Last quarter, FedEx said that it earned $459 million, or $1.45 per share, which was at the top end of its recently lowered estimate. Revenue grew by 3% to $10.79 billion. It earned $464 million, or $1.46 per share, on revenue of $10.52 billion in the same quarter a year ago.

The profit result 'was a little better than we anticipated two weeks ago -- slightly down year-over-year due to the tough global economy,' CFO Alan Graf said on the earnings call.

Wall Street was looking for $1.40 per share in net income on $10.7 billion in revenue. ...

Outside of earnings, FedEx is looking to become a leaner, more streamlined company through a large restructuring program that is targeting $1.7 billion in profit improvements by the end of FY 2016.

The company thinks the shipping delivery business is in the midst of a change and it's not sitting back. Instead, the company is looking to leverage technology -- from more fuel-efficient planes to cloud computing -- to help drive productivity and increase profits.

The $1.7 billion earnings improvement FedEx is targeting is a big figure and represents about $3.50 per share after tax. With much of the benefit coming by FY15, the company should be able to generate earnings above $10 in a couple of years even without a big improvement in the global economy. ...
The full BullMarket.com earnings analysis includes a look at historical earnings data and EPS trends for the companies above and more; examines past investor reactions to earnings in various contexts; gives options activity analysis; reviews previous-quarter earnings; and gives an opinion on both what earnings will look like and how investors will react based on the aforementioned data points.

Just a few of the correct calls BullMarket.com made for Q3 so far were:
to be bullish on Adobe (ADBE) ahead of earnings.
to be bullish on Salesforce.com (CRM) ahead of earnings.
to be bearish on Hewlett-Packard (HPQ) ahead of earnings.
 ... Continue to read.
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