Which Stocks Look Ready to Pop and Drop with Earnings This 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 Hain Celestial:

Hain has topped analyst EPS estimates each quarter over the past two years. Over that period, the stock has risen the next session eight of eight quarters. Seasonally, the stock has risen three times in the last four years.

Last quarter, the company reported that its fourth-quarter net income was $23.4 million, or 50 cents per share, reversing a year-ago loss of -$1.7 million, or -4 cents per share.

On an adjusted basis, it earned 47 cents per share, up from 36 cents per share a year earlier.

Revenue jumped 22% to $350.8 million. Its reported revenue does not include $23.0 million of net sales in 2012 from the private label chilled ready meals and Daily Bread sandwich businesses, which it is selling.

The Wall Street consensus estimates were that the company would earn 45 cents per share on revenue of $365.6 million.

Operating free cash flow surged over 150% to $36.8 million.

Revenue in the U.S. rose 5% to $242.6 million, while operating profit increased 14% to $36.7 million. Operating profit margin increased 120 basis points to 15.1%. Consumption growth was 10%.

U.K. revenue surged from $10.5 million to $56.7 million, while its operating profit was $1.3 million versus a -$0.6 million loss a year ago. Rest of the World sales climbed 12% to $51.5 million, with operating profits increasing 31% to $4.7 million. ...

Outside of earnings, Hain is the top natural packaged food company in the nation and it has been using smart, bolt-on acquisitions for a number of years to expand an already strong portfolio. More recent acquisitions -- including the U.K.'s Daniels Group, which makes fresh and chilled foods (the fastest-growing categories in the U.K.); Ireland's Cully & Sully (pies and soups); and most recently the U.K.'s Premier Foods plc, which makes peanut butter, honey, jams, fruit and jelly, marmalade, and chocolate product offerings -- have focused on improving its U.K. and European portfolio.

With a strong portfolio of brands, we would expect Hain to continue to ride the public's embrace of natural and organic foods. The Baby Boom generation likes the type of food Hain offers because as its members age they have become more health conscious. Meanwhile, many younger buyers have been raised eating natural foods and thus aren't converts. ...

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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