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Which Stocks Look Ready to Surge and Sink with Earnings Next Week?

the BullMarket.com Staff

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 Herbalife (HLF), Coach (COH), 3D Systems (DDD), Whole Foods (WFM), SodaStream (SODA), Mastercard (MA), OpenTable (OPEN), LinkedIn (LNKD), and Enterprise Products Partners (EPD).

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

Mastercard has topped analyst EPS estimates each quarter over the past two years. During that period, the stock has risen the next session five of eight quarters. Seasonally, the stock has risen twice in the last four years.

Last quarter, Mastercard earned $766 million in the first three months of the year, up 12% from the same period a year ago. It equaled $6.23 per share, beating the $6.18 per share consensus estimate. EPS grew by 17% due to share repurchases in the prior year.

Revenue rose 8% to $1.9 billion, slightly less than the $1.93 billion expected by Wall Street.

Mastercard's worldwide gross dollar volume (GDV) was up 12% on a local currency basis. U.S. GDV grew 4%, with credit volume up 2%.

Outside of the U.S., volume growth was 16% on a local currency basis, driven by the APMEA region, which delivered more than 20% growth. Europe and Latin America reported "solid double-digit" growth, Hund-Mejean said.

Per quarter volume grew 16% on a local currency basis, including more than 20% in Latin America and APMEA and growth in the high-teens in Europe.

Cross-border fees grew 14% while cross-border volumes grew 16%. Management attributed the difference to a higher mix of intra-Europe activity, which carries a lower revenue yield.

Transaction processing fees grew 9%, driven mainly by 12% growth in processed transactions. The gap between these two growth rates can be attributed mainly to U.S. PIN debit transactions that deliver a lower-than-average revenue yield, the company said. ...

Outside of earnings, Mastercard has a long runway for continued growth as the global economy moves from a cash-based system to electronic payment.

The U.S. debit rules that crimped business a bit in 2012, meanwhile, are now largely in the past and Mastercard didn't have as much debit card exposure as Visa, and could possibly take some share given the new rules.

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 (NYSE:V) an irrevocable and perpetual license of approximately $143 million per year, payable quarterly. ...

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 positive reaction to Facebook's (FB) results.
  • to expect a positive reaction to Apple's (KO) results.
  • to expect a negative reaction to NetFlix's (NFLX) results.
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