Previewing Earnings for RIM, Nike, Walgreen & Others

Indie Research

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 still set to report results, including Bed Bath & Beyond (BBBY), 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 CarMax:

CarMax has surpassed analyst EPS estimates three of the past eight quarters, missing the consensus four times and meeting it once. During that time, the stock has risen the next session one of eight quarters. Seasonally, the stock has risen once in the past four years. ...

Last quarter, CarMax said it earned $111.6 million for its fiscal second quarter that ended on August 31st, compared with $111.2 million a year earlier. EPS was flat at 48 cents and missed the analyst consensus estimate by four cents.

Revenue rose 6.6% to $2.76 billion, which was in line with the Street estimate.

CarMax's bottom-line growth was hampered by an 11% year-over-year leap in overhead costs to $254.7 million. The company blamed the higher costs on the "ramp in our store growth rate" and "difficult" comparisons with the year before.

The company said it plans to open 10 stores this year, which was double the number it opened in 2012. In Q2 it opened three used car superstores, entering the Fort Myers, Florida, market with two outlets and ope CarMax said wholesale unit sales shrank 2%, while in total used-car unit sales grew by 8%. ...

Outside of earnings, CarMax is a well-run company with solid expansion opportunities. As anyone who has bought a used car in 2008-9 and then again more recently can attest, though, used car prices have increased fairly dramatically the last few years. That can help shift sentiment towards the purchase of new cars. Meanwhile, there also is a bit of a shortage for cars from the years around the Great Recession, although the supply picture does appear to be improving.

While analysts are getting more bullish on the name, the stock has had a strong run ...

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 Oracle (ORCL) ahead of earnings.
  • to be bearish on Hewlett-Packard (HPQ) ahead of earnings.
  • A daily investment service that is committed to creating long-term wealth for its members, BullMarket.com's Recommended List of stocks is up 33.3% from 2008-2011 versus a -14.4% return for the S&P, a 47.7% outperformance, topping the benchmark each year since the start of the Great Recession. Subscribers receive actionable market commentary, access to 40+ stock ideas on the Recommended List, and real-time trade alerts. Plus, sign up for a free trial today to view Bull Market's in-depth Special Reports - including its annual High Yield and MLP reports - and its timely Earnings Previews, which are published every Friday during the heart of earnings season. Get a Risk-Free Trial to Bull Market Today! (Please note returns are unaudited.)

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