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Which Stocks Look Ready to Pop and Drop with Earnings This Week?

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 Michael Kors (KORS), Home Depot (HD), Cisco (CSCO), NetApp (NTAP), Abercrombie & Fitch (ANF), Wal-Mart (WMT), Target (TGT), Gap (GPS), Dollar Tree (DLTR), and Dell (DELL).

Here is just a tiny sample of what BullMarket.com wrote about Wal-Mart: Wal-Mart has topped analyst EPS estimates five of the past eight quarters, meeting estimates once and missing twice. During that period, the stock has risen the next session three of eight quarters. Seasonally, the stock has risen three of the past four years.

Last quarter, the world's largest retailer's 2Q profits came in ahead of Wall Street's expectations, but sales were a little light as was its full-year guidance. Wal-Mart said it expects third-quarter EPS of $1.04-$1.09. The consensus had been $1.05 per share.

For the full year, the company forecast a profit of $4.83-$4.93 per share. It previously guided for EPS of $4.72-$4.92. Analysts were expecting EPS of $4.93 and that full-year view hasn't moved.

Wal-Mart 's second-quarter profit rose nearly 6% to $4.02 billion, or $1.19 per share, from $3.80 billion, or $1.09 per share, a year earlier. Revenue rose 5% to $113.53 billion.

Analysts had expected a profit of $1.17 per share on revenue of $114.63 billion.

Wal-Mart's U.S. stores reported a 2.2% increase in same-store sales, reversing a -0.9% decline in the year-earlier period. Ticket and traffic were both positive. The U.S. stores have now delivered positive comp sales for four-consecutive quarters. The U.S. unit reported $5.25 billion in operating income, up 5.3%, on a 3.8% increase in net sales to $62.4 billion. ...

Outside of earnings, Wal-Mart's stock has been on a surprisingly good run since getting hit with bribery charges in Mexico. The retailer has been performing better operationally, helped by adding back SKUs and its compare and save ad campaign. Investors who follow the stock may remember that the company made an earlier misstep by removing products, which upset customers.

While Wal-Mart has seen same-store sales growth rebound, better expense controls, and improved margins, its sale growth is still lagging most of its peers. ...
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 Q3 so far were:

  • to be bullish on Qualcomm (QCOM) ahead of earnings.
  • to be bullish on Sodastream (SODA) ahead of earnings.
  • to be bearish on J.C. Penney (JCP) 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 33.3% from 2008-2011 versus a -14.4% return for the S&P, a 47.7% 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.)