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 two years, BullMarket.com used the data it has collected to correctly predict investor reactions for nearly two-third of the stocks it's previewed.
In its latest earnings preview, BullMarket.com looks at several popular stocks, including SodaStream (SODA - News), Blue Nile (NILE - News), priceline.com (PCLN - News), Nordstrom (JWN - News), Nuance (NUAN - News), NVIDIA (NVDA - News), STEC (STEC - News), and Cisco (CSCO - News).
Here is just a tiny sample of what BullMarket.com wrote about Blue Nile:
Blue Nile is an online retailer of diamonds and fine jewelry.
Last quarter, the company reported weaker than expected Q4 sales and profits, and offered disappointing guidance.
The online diamond retailer posted sales of $112.3 million, down -2.1% from a year ago and shy of the Street consensus at $123.2 million. Profits of 30 cents a share were also lower than the Street consensus at 42 cents.
U.S. engagement sales for the fourth quarter were $56.2 million, compared to $59.8 million in the fourth quarter of 2010. The reduction in net sales was primarily driven by continued weakness in demand from its core engagement customers and a recent slowdown in growth from the high-end consumers.
U.S. non-engagement sales for the fourth quarter were $40.4 million, compared to $39.7 million in Q4 2010, for growth of 2%.
In total, orders of non-engagement products from U.S. consumers grew by greater than 20% in the quarter; however, the average revenue per order was down by over -15%, management said.
Sales of non-diamond jewelry products grew by more than 10%, and were partially offset by a slight decline in sales of diamond jewelry.
International net sales for the fourth quarter totaled $15.7 million....
Blue Nile has beaten EPS estimates once in the past eight quarters, missing estimates five times and meeting twice. During that period, the stock has risen the next session once. Seasonally, the stock has risen twice in the past four years. ...
Outside of earnings, we like Blue Nile's low-cost, highly scalable business model and its ability to play its payables float to boost cash flow. However, the company just has not been able to deliver even as consumer spending has picked up, and with diamond and precious metal prices higher (its input costs), it could continue to struggle. However, its input costs, particularly diamonds, are expected to start
to ease.
The company has increased marketing spending and been more aggressive on pricing to try to gain market share in the non-engagement category. While initial results have been positive, it's also likely to hurt margins. ...
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.
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