Which Stocks Look Ready to Sink and Surge with Earnings?

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 Zillow (Nasdaq:Z), Whole Foods (WFM), Disney (DIS), SodaStream (SODA), Groupon (GRPN), Green Mountain Coffee Roasters (GMCR), Priceline.com (PCLN), NVIDIA (NVDA), and Monster Beverage (MNST).

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

Disney has beaten EPS estimates six of the past eight quarters over the last two years, meeting the consensus once and missing once. During that span, the stock has risen the next session five of eight quarters. Seasonally, the stock has risen two of the past four years.

Last quarter, Disney reported net income of $1.38 billion, or 77 cents per share, during its fiscal first quarter that ended December 29th. That compared with net income of $1.46 billion, or 80 cents per share, in the same period in 2011.

Excluding items, Disney said it would have earned 79 cents per share, which topped the analyst consensus estimate by 3 cents.

Revenue grew by 5% year over year to $11.3 billion, edging the Street consensus of $11.17 billion.

The company, which bought George Lucas's Lucasfilm Ltd. and with it rights to the "Star Wars" franchise, announced it would release another installment in 2015. ...

Outside of earnings, we view Disney as a solid company with terrific franchise brands. Content is king at Disney and the company has made a number of excellent content acquisitions in the past, starting with Pixar and following up more recently with Marvel and now Lucasfilms. Pixar has created franchises like "Toy Story" that not only produced great box office results but spawned toys, games, and theme park rides. The company followed the same M.O. in buying Marvel and characters like "Iron Man" and "The Avengers." Toss in "Star Wars" and the company has years worth of movies it can churn out.

Meanwhile, ESPN remains the leader in U.S. sports programming and the theme parks continue to attract hordes of visitors around the world. China is a huge potential market. Mickey Mouse is possibly one of the world's best-known images and the Disney-themed park in Shanghai should be a huge success. ABC's results can be lumpy as no single network dominates the ratings for an extended period of time, but TV is still a pretty good business. ...

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 Facebook (FB) 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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