Which Stocks Look Ready to Surge and Sink 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.

In its latest earnings preview, BullMarket.com looks at several popular stocks, including Deckers Outdoor (DECK), Apple (AAPL), Visa (NYSE:V), Qualcomm (QCOM), Facebook (FB), F5 Networks (FFIV), Starbucks (SBUX), and Amazon.com (AMZN).

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

Facebook has surpassed analyst EPS estimates three of four quarters since it went public. Over that period, the stock has risen the next session two of four quarters. Last year, the stock fell the next session following its earnings report.

Last quarter, Facebook said that its net income was $219 million, or 9 cents per share, in Q1, up from $205 million, or 9 cents per share, a year ago when the company was still private.

Excluding one-time items, which consist mostly of non-cash stock-based compensation expense, Facebook said it earned 12 cents per share, which was a penny below the consensus.

Total revenue grew 38% to $1.46 billion, topping analysts' expectations of $1.44 billion.

By region, revenue in the U.S. and Canada increased 29% to $679 million, which was 47% of total revenue. Europe grew by 29% to $423 million, or 29% of the total; Asia was up 67% to $197 million (13.5%); while the Rest of World jumped 83% to $159 million (11%).

While mobile revenue grew to 23% of the total, desktop advertising was flat. ...

Outside of earnings, whether you love, hate, or are indifferent about Facebook, the one thing that appears to be becoming more evident is that the company has done a good job on the innovation front and learned to monetize its huge user base over the past year.

Since its IPO, new monetization efforts include newsfeed ads (ads directly integrated into the newsfeed); ad exchange (real-time, bid-based system allowing advertisers to "re-target" users on Facebook using data collected from their online surfing activities outside of Facebook); custom audiences (which allows marketers to "merge" their customer/prospect databases with Facebook's database); offers (gives advertisers the ability to target Facebook users with special offers); app downloads (enables app developers to market their apps to Facebook mobile users in order to drive app discovery and downloads); and partner categories (gives advertisers ability to easily utilize offline data from the likes of Axciom, Epsilion, and Datalogix to target Facebook users). ...

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 Q2 so far were:

  • to expect a negative reaction to Google's (GOOG) results.
  • to expect a negative reaction to Coca-Cola's (KO) results.
  • to expect a negative reaction to NetFlix's (NFLX) 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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