Which Stocks Look Ready to Sink or Surge 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 Zillow (Nasdaq:Z), Hain Celestial (HAIN), Monster Beverage (MNST), Telsa (TSLA), Michael Kors (KORS), Whole Foods (WFM), SolarCity (SCTY), Qualcomm (QCOM), Groupon (GRPN), and Priceline.com (PCLN).

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

Hain has topped analyst EPS estimates seven of eight quarters over the past two years, meeting estimates once. During that period, the stock has risen the next session five of eight quarters. Seasonally, the stock has risen three times in the last four years. ...

Last quarter, the company said it earned $25.9 million, or 53 cents per share, for its fiscal fourth quarter that ended June 30th, which was up from $23.4 million, or 50 cents per share, a year earlier.

On an adjusted basis, Hain's per-share profit rose to 65 cents from 47 cents. Revenue grew 32% to $463.5 million from $350.8 million.

The adjusted results topped the consensus estimates that called for net income of 61 cents per share on $453.4 million in sales.

U.S. sales rose 18 percent to $285.2 million and sales in the U.K. more than doubled to $121.1 million. ...

OOutside 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. We would expect the company to continue to ride the public's embrace of natural and organic foods given its strong brand portfolio. As the Baby Boom generation ages, it has become more health conscious. Meanwhile, many younger buyers were raised eating natural foods and are already believers in natural foods.

While Hain is a good company with a number of strong brands riding a nice secular trend, our problem with the stock is that Hain's core business is a high single-digit sales grower in an industry with average margins trading at a pretty hefty multiple. Hain is also a serial acquirer, making it essentially an organic food roll-up play. These types of roll-up play stocks don't typically command outsized multiples, even if they are growing smartly. ...

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 positive reaction to Google's (GOOG) results.
  • to expect a negative reaction to LinkedIn's (LNKD) results.
  • to expect a positive reaction to 3D Systems (DDD) results.
  • 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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