Which Stocks Look Ready to Pop or Drop After 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 20- to 30-page Earnings Preview report for the week ahead each Friday.

In its latest earnings preview, BullMarket.com looks at several popular stocks, including Salesforce.com (CRM), DSW (DSW), Home Depot (HD), Best Buy (BBY), Green Mountain (GMCR), Deere (DE), Splunk (SPLK), Target (TGT), Pandora (NYSE:P), and The Fresh Market (TFM).

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

DSW has topped analyst EPS estimates seven of the past eight quarters, missing once. During that period, the stock has risen the next session seven of eight quarters. Seasonally, the stock has risen three times in the past four years. ...

Last quarter, the retailer reported that its net income grew to $33.7 million, or 73 cents per share, for the three-month period that ended August 3rd, compared with the $29.3 million, or 65 cents per share, that it reported for the year-earlier period.

Adjusted for one-time items, the company said it earned 97 cents per share, swamping the 80 cents per share that Wall Street analysts had projected.

Sales grew by 9.7% to $562.0 million. The results edged the $559.7 million Street consensus.

Revenue from the core DSW stores group increased by 10.1% to $530.9 million. Sales at DSW stores on a same-store basis were up by 4.4%. The comparable-sales performance was driven by increases in conversion, average unit retail, and units per transaction, the company said. ...

Outside of earnings, we've long thought highly of the DSW model, which sells brand-name footwear at a discounted price in an attractive store setting. The company has ridden a strong footwear cycle to nice growth, and built solid brand awareness and loyalty.

The company has also invested a lot in new systems and tools to better manage its business and drive sales online and in its stores. It should begin to see the payoff from those investments down the road.

The move into accessories could be an opportunity to boost traffic if it resonates with customers, and so far the early results have been good. ...

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 expect a negative reaction to Cisco's (CSCO) results.
  • to expect a negative reaction to Tesla's (TSLA) results.
  • to expect a positive reaction to 3D Systems (DDD) results.
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