Earnings Plays

so trading man, can u explain this fake-out

what a crappy trade. i sold at the low of the day. lol

lost $4

this was a $600 trade i could have got out of last night

WOWWWWWWWWWWW
 
cash, here is a simple after the fact explanation, from my 3 months playing earnings. u are looking for a triple play:

beat on:
EPS
REV
OUTLOOK

ok, this is an after the fact analysis of mens wearhouse. the eps was expected to come in at (.16) it came in at (.06) so they beat on eps 1 out of 3

the revs were 476m estimated at 490m, so they missed on revs.

and the outlook: they guided .45 to .65 for first half vs .49 estimate, so this is an upside guidance

in general guidance trumps the entire move, its like spades, lol. eps usually will determine which way the move will go. and revs are the least important. so on this earnings report, provided the stock was not over bought to begin with should lead to a big up move.

this is an after the fact analysis and is easy when it responds like that. go look at HOTT they did well and went down.

go figure.
 
Quote from chuckybrown70:

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and the outlook: they guided .45 to .65 for first half vs .49 estimate, so this is an upside guidance

in general guidance trumps the entire move, its like spades, lol. eps usually will determine which way the move will go. and revs are the least important. so on this earnings report, provided the stock was not over bought to begin with should lead to a big up move.
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I'm not sure guidance of $0.45 to $0.65 vs. $0.49 estimate should be considered good news. There is still a $0.04 chance of not meeting estimates (bad news) and the fact that the range is so wide leads me to believe the company has some unpredictable events upcoming in the period which could drastically affect earnings. Volatile earnings should be considered bad news for the most part.
 
Quote from cashmoney69:

how is it possible to beat earnings but not revenue?..dont they go hand-in-hand?. But thaks for the reply.
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Revenue increases are not necessary to increase earnings. Cost cutting will do the same thing and could be considered even better than a revenue increase in some situations.
 
cash. mind you, this is only from 3 month experience, but rev is the least important. rev can go up and eps can go down, just by having lower margins, which u would see in a recession. and like kass said they can have lower revs but cut costs and raise eps.

eps is profit and loss and rev is what u sell and guidance is what should affect your p/e ratio because that indicates growth. guidance is usually the most important.

guidance that MW gave is higher than the analysts expectation, even if it falls in that lower range. even the analysts have a range, so that number was either trhe mean or the median so the guidance is way higher even the low end of the guidance hits the expectation.

now i am no expert, but this is how i read into this report after doing these earnings plays for the past 3 months. personally i would not expect such a big up move from this report, but what i have found affects it is short interest. look at BWLD or AZO. these two really popped and the reason the pundits gave was becasue of shorts covering. something to think about.
 
so much to I can say but not enough time.

I target $1 per share profit. Usually $20 stocks and above. Recently, i have been looking @ $5 and under stocks with a 50cent target.

the more u trade earnings the more u learn to interpret the price activity(before and after the report). Sometimes things happen that u wont understand. You're never going to have all the answers, but trying to understand why you've made/lost money helps you plan/understand the next earnings trades.

MW- better than expected earnings. revenue did very well. have to go back to late 07 for those numbers. the setup for next qtr. is there. expect eps to beat (play it long next time), but if rev isnt there this stock will get slammed very hard.

XYZ corp could have reported the same numbers and tumbled b/c they were actually expected to see a profit (regardless of what estimates were). Over time you will see what the different expectations are between the two companies(xyz & mw) beforehand.
 
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