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), Buffalo Wild Wings (BWLD), Enterprise Products Partners (EPD), 3D Systems (DDD), Visa (NYSE:V), MasterCard (MA), CVS Caremark (CVS), OpenTable (OPEN), Facebook (FB), and LinkedIn (LNKD).

Here is just a tiny sample of what BullMarket.com wrote about Buffalo Wild Wings:

Buffalo Wild Wings has beaten analyst EPS estimates four of eight quarters over the past two years, missing the consensus four times. During that span, the stock has risen the next session three of eight quarters. Seasonally, the stock has risen once in the past four years.

Last quarter, the company said its fourth-quarter profit grew to $16.7 million, or 89 cents per share, up from $13.6 million, or 73 cents per share, in Q4 2011. Wall Street, however, was looking for 96 cents of EPS.

Q4 sales grew to $303.8 million, which was well ahead of the $280.5 million consensus sales estimate.

Same-restaurant sales increased by 5.8% at company owned restaurants and 7.4% at franchised locations in Q4. That was on top of an 8.9% gain at company stores for the comparable period a year earlier.

The company earned $57.3 million, or $3.06 per share, for the full year, compared with $50.4 million, or $2.73 per share, on $1.04 billion in sales. It reported $784.5 million in sales in 2011.

Management forecast another strong year in 2013. It guided for net income to grow by 25% this year when compared on a 52-week basis. (There was a 53rd week of sales in 2012.) As compared to 2012's actual results, profit is expected to grow by 17%. ...

Outside of earnings, Buffalo Wild Wings has been one of the fastest-growing full- service restaurant chains around. While it operates in a crowded space with a bevy of competitors, we like the ongoing expansion beyond its Rust Belt core and its simple strategy of selling "wings, beer and sports."

Separately, wing prices have started to fall, which has helped to lift the stock. ... We lalso ike the concept of moving to per-pound pricing, but it could be a tricky transition if customers perceive the change as less for more. Thus, we appreciate the fact management is taking its time to understand how customers might react to the change rather than rushing into 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 Q1 so far were:

  • to be bullish on Netflix (NFLX) ahead of earnings.
  • to be bearish on Baidu (BIDU) ahead of earnings.
  • to be bullish on Coach (COH) 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 104.9% from 2009-2012 versus a 57.9% return for the S&P, a 47.0% 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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