Which Stocks Look Ready to Pop and Drop with Earnings Next Week?

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.

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 Herbalife (HLF), First Solar (FSLR), Baidu (BIDU), Sourcefire (FIRE), Visa (V), Mastercard (MA), Yelp (YELP), Hain Celestial (HAIN), Annie's (BNNY), OpenTable (OPEN), Blue Nile (NILE), and LinkedIn (LNKD).

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

Visa has beaten analyst EPS estimates seven of the past eight quarters, meeting the consensus once. Over that stretch, the stock has risen the next session four of eight quarters. Seasonally, the stock has risen three times in the last four years.

Last quarter, the company incurred a net loss of -$1.8 billion, or -$2.74 per share, compared with a year-earlier profit of $1.0 billion, or $1.43 per share.

Excluding a litigation charge and a related tax benefit, the company earned $1.1 billion, or $1.56 per share. Wall Street was expecting $1.45.

Spending on Visa's cards grew by 11% worldwide during the quarter on a constant-currency basis to $979 billion. The growth was 6.6% including the impact of currencies. The number of processed transactions increased by 1% to 13.1 billion and cross-border volume, which measures spending by cardholders outside of their home countries, grew by 14%. ...

Outside of earnings, Visa is a cash machine that is riding a huge secular trend as consumers worldwide move away from cash in favor of electronic payments. Management says that despite Visa's success at increasing the penetration of electronic payments, the total opportunity to take share from cash and checks has actually grown since its IPO, driven by population growth and the expansion of emerging economies where the use of credit and debit cards is still slim.

Visa is susceptible to a downturn in the global economy, of course, but over the long term we think that would only slow the mega-shift away from cash and checks, it won't stop 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 Akamai (AKAM) ahead of earnings.
  • to be bullish on Facebook (FB) ahead of earnings.
  • to be bearish on Deckers Outdoor (DECK) 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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