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.

In its latest earnings preview, BullMarket.com looks at several popular stocks, including Google (GOOG), Yahoo (YHOO), Coca-Cola (KO), Kinder Morgan Energy (KMP), Intel (INTC), eBay (EBAY), Microsoft (MSFT), Goldman Sachs (GS), and Mosaic (MOS).

Here is just a tiny sample of what BullMarket.com wrote about Coca-Cola:

Coca-Cola has surpassed analyst EPS estimates six of the past eight quarters, meeting the consensus twice. During that time, the stock has risen the next day five of eight quarters. Seasonally, the stock has risen three of the past four years.

Last quarter, Coca-Cola opened the year by reporting better than expected revenue, profit and gross margins. It earned $1.75 billion, or 39 cents per share, down from $2.05 billion, or 45 cents per share. The quarter was impacted by a calendar shift that cut two selling days compared to a year ago.

On an adjusted basis, its 46 cents per share in net income topped the Street estimate by a penny.

Revenue grew by 1% to $11.03 billion, ahead of the $10.94 billion that Wall Street expected. The results were impacted by currency headwinds and other costs. Volume grew by 4%, which was on top of a 5% increase a year ago.

Its carbonated soft drink (CSD) volume -- sparkling beverages in Coke's lingo -- grew revenue by 3%, led by brand Coca-Cola growth of 3%, Fanta growth of 6%, and Sprite growth of 5%. Volume was down -1%, but that was offset by price increases.

Worldwide still beverage volume grew 6% in the quarter on top of 6% growth during the prior-year period, with growth across most still beverage categories, including ready-to-drink tea, juices and juice drinks, as well as packaged water, the company said.

By region, total North American volumes grew by 1%; they increased 4% in Latin America; 3% in Asia-Pacific; and 15% in Eurasia and Africa. European volume was flat but that was an improvement from declines in the year-earlier period. ...

Outside of earnings, Coca-Cola is a classic core holding for many investors, including in Berkshire Hathaway's (BRK.B) portfolio. While the industry has come under attack for the sugar content of its drinks, and many consumers in mature markets are reducing their soda consumption, there are still plenty of growth opportunities overseas for the core Coca-Cola products while the company builds its portfolio of non-carbonated drinks like teas and juices. The company has a massive distribution network that can reach the smallest villages around the world and few brands are as instantly recognizable as Coke.

Operationally, after gaining control of the bottling operations and squeezing out excess costs, the company is now trying to unlock some value by getting out of the low-margin distribution end of the business. The company generates massive cash flow and it is returning a lot of that cash to shareholders in the form of buybacks and dividends, which is another plus. ...

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.

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.)

View Comments