Which Stocks Look Ready to Jump After Earnings Next Week?

the BullMarket.com Staff

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 20- to 30-page Earnings Preview report for the week ahead each Friday.

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 Intuitive Surgical (ISRG), Intel (INTC), IBM (IBM), Cree (CREE), eBay (EBAY), Kinder Morgan (KMP), Microsoft (MSFT), Chipotle Mexican Grill (CMG), McDonald's (MCD), and Google (GOOG).

Here is just a tiny sample of what BullMarket.com wrote about Microsoft:

Microsoft has topped analyst EPS estimates seven of the past eight quarters, meeting estimates once. Over that span, the stock has risen the next session five of eight quarters. Seasonally, the stock has risen three of the last four years.

Last quarter, the company reported its first loss as a public company after it wrote off its purchase of the online advertising firm aQuantive. Microsoft bought the Seattle-based firm for $6 billion in cash in 2007.

The software giant reported a fiscal fourth-quarter loss of -$492 million, or -6 cents a share, compared with a profit of $5.9 billion, or 69 cents a share, a year ago.

On an adjusted basis to exclude the write-down, Microsoft earned 73 cents a share. Revenue increased 4% to $18.06 billion.

Analysts had expected a profit of 62 cents per share on revenue of $18.15 billion.

Microsoft estimated the worldwide PC market was roughly flat during the quarter with approximately 85 million PCs sold. Business PCs were up 1% and consumer PCs were down -2%.

It released a preview of Windows 8 during Q2 and said the new operating system would be released to the public on October 26th. ...

Outside of earnings, we've long said Microsoft doesn't get the credit it deserves in certain areas, including cloud computing with Azure, which is doing very well. Its Server & Tools division has been posting solid results, while Xbox and Kinect have also been winners, though Xbox is getting long-of-tooth and probably needs a refresh to re-energize sales.

Windows 8 could also be a big winner, though whether it will help Microsoft make inroads in the mobile phone and tablet space given its late start is an open question. There are also questions surrounding how it will do in the enterprise market, which has traditionally been Microsoft's bread and better. Gartner recently predicted it would only garner 20-25% because of its touch-centric interface.

The Surface tablet looks interesting, but Microsoft doesn't have a very good track record on the hardware side of the business, and the Zune immediately comes to mind as an epic failure. However, we do think the keyboard and ability to run Office differentiates the device, and corporate users could want it. ...

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 were:

  • to be bullish on Qualcomm (QCOM) ahead of earnings.
  • to be bullish on Fusion-IO (FIO) ahead of earnings.
  • to be bearish on Facebook (FB) ahead of earnings.
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