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.
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 Coach (COH), True Religion (TRLG), MasterCard (MA), Enterprise Products Partners (EPD), Skullcandy (SKUL), OpenTable (OPEN), Blue Nile (NILE), and LinkedIn (LNKD).
Here is just a tiny sample of what BullMarket.com wrote about MasterCard:
MasterCard has surpassed the EPS consensus each quarter over the past two years. Over that stretch, the stock has risen six of eight quarters. Seasonally, the stock has risen twice in the last four years.
Last quarter,the company reported a profit of $681 million, or $5.36 per share, compared with a profit of $562 million, or $4.29 per share, a year earlier.
Analysts were expecting earnings of $5.29 per share on $1.73 billion in revenue.
Purchase volume on MasterCard cards increased 17% to $629 billion. Processed transactions increased 29% to 7.7 billion, and cross-border volume was up 18.
MasterCard said its operating expenses increased 14% to $758 million. Excluding the effect of exchange rates, costs were up 15%, driven primarily by higher general and administrative expenses.
MasterCard said it saw process volumes for Portugal, Italy, Ireland, Greece and Spain grow in the mid-teens in aggregate. New business wins, particularly in Italy and Ireland, compensated for slowing trends in Spain and Greece.
Elsewhere in the world, Latin America, the Asia-Pacific, Middle East, Africa, region volume growth was described as healthy with domestic and cross-border volume growth rates all greater than 20%. ...
Outside of earnings, MasterCard has a long runway for continued growth as the global economy moves from a cash-based system to an electronics payment. The U.S. debit rules will crimp business a bit in 2012, but we don't expect them to inhibit the long-term growth for either company as the industry appears to be adjusting well. MasterCard, meanwhile, doesn't have as much debit card exposure as Visa, and could take some share.
However, MasterCard does have more exposure to the world's weakest region, Western Europe, as Visa Europe is a separate entity owned and governed by its European member financial institutions. It pays Visa (V) an irrevocable and perpetual license of approximately $143 million per year, payable quarterly.
The recently announced merchant settlement, meanwhile, is a long-term positive for MasterCard because it removes a dark cloud that has followed it. Given the mixed reaction from trade groups we'd say it was a fair settlement if only because no one group seems to have benefited more than another. More important is the fact Wall Street abhors uncertainty and with a settlement on the table it removes
a major unknown. ...
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 recent correct calls BullMarket.com made for Q2 were:
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