Stocks beat Earnings Yet Go Down!!!! Is This a Warning?
Recently, several Dow and NASDAQ stocks beat eps numbers, yet still saw their pps retreat. This is what can happen when the NASDAQ hits a all-time high day after day. Something's gotta give.
I suspect that the decreases in pps numbers were mostly do to conservative guidance going forward. Just one more sign that the good times may be over for a while.
As for FB, I think the expected good 3Q earnings have already been built into the price. It's going to take some extraordinary news to get our pps to $100 any time soon. 3Q earnings aside, I don't see anything on the horizon that fits that definition. We already know that revenue streams from WhatsApp aren't expected to have an impact until late 2015 at the earliest.
The correction is coming, and sadly for FB, it will retreat along with lots of other solid companies. But the good news is, if you are a long player, there will be an opportunity to buy in or buy more shares at a price lower than today's $74. FB is a solid HOLD with a SOFT BUY if the pps retreats to $70. or below. I say "SOFT" because I worry more about the NASDAQ than I do about FB's future.
There's many logical reasons why Dow and Naz up while certain stock eps beaters are down.
Firstly, the new market highs have been baby steps, no crazy stupid money, pouring into stocks by people thinking they will miss the boat, not all over anyways.
Secondly, reaching the new market highs required participation from lagging sectors. Perhaps you have noticed that the beaten down sectors are making a comeback, like financials, retail, home building etc.. There would have been no new high this week without them. This on top of the winners taking a breather , like FB , will most certainly provide more market highs. The lagging sectors are still far from their all time highs.
Thirdly, you're not specific on which eps beater is in retreat... too many variables within individual stocks to make a broader statement relating to overall market and to predict an entire market qtr based on a stock a two. Perhaps you are right, news was in the stock price already. Perhaps technically, there's a problem.
To conclude, US Equities and Bond Market is the worlds safe haven for the moment. The reason should be obvious if up on current world events. In a nut shell, the US showing the best signs of economic stability while most of Europe is either still behind the curve, or sanctions have hurt a steady rebound. Our markets have the best chance for on going growth and safety is what big money wants. FB, believe it or not, falls into many categories of where money has and will go. FB looks darn good in this range, technically speaking IMO. As well, FB is in a trading world of it's own and contradicts overall market moves more often than not. FB will see more record highs before visiting $70, IMO it's building up for another leg up, could take a week or another month but the lows of late show support, at any volume by the way. I'll consider a sell in the 80's, maybe, if and when there's truly an overall market bubble...this is no stinking bubble.
hmmm... i like the way you write. Say it with intelligence and knowledge. Couldn't agree with you more on this post and others. YOU have more understanding of this stock than anyone I've read posting here.