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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. As a special holiday treat, BullMarket.com is publishing two extra supplemental previews for December.

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 Oracle (ORCL), Bed Bath & Beyond (BBBY), FedEx (FDX), Research in Motion (RIMM), Nike (NKE), CarMax (KMX), Walgreen (WAG), and Darden Restaurants (DRI).

Here is just a tiny sample of what BullMarket.com wrote about Bed Bath & Beyond: Bed Bath & Beyond has beaten EPS estimates seven of the last eight quarters, missing them once. Over that period, the stock has risen the next session five of eight quarters. Seasonally, the stock has risen three of the last four years. ...

Last quarter, the company reported earnings of $224.3 million for its second quarter that ended on August 25th, or 98 cents per share. Last year, it reported a profit of $229.3 million, or 93 cents per share, for the same period.

Sales rose 12.1% to $2.59 billion and were up 3.5% on a comparable-store basis.

Wall Street was looking for EPS of $1.02 on $2.56 billion in sales. It was a rare bottom-line miss for the retailer.

For the fiscal first half, comp-store sales increased by approximately 3.3% compared with an increase of approximately 6.3% last year. The increases in comp store sales for the quarter and half were attributed to growth in both the average size and the number of transactions compared with the comparable year-earlier periods. ...

Outside of earnings, Bed Bath & Beyond has three solid retail concepts with the Christmas Tree Shops, buybuy Baby, and its namesake store, and solid expansion opportunities. The company has also benefited in recent years from the closure of rival Linen & Things.

The recent acquisition of Cost Plus looks like a good one because the majority of its merchandise is exclusive to its stores, and because it sells products from some areas where Bed Bath & Beyond doesn't have a big footprint. Together with another recent acquisition, business-to-business textile product distributor Linen Holdings, the deals could help Bed Bath & Beyond build a portfolio of private label products that tend to provide fatter margins.

Bed Bath & Beyond has also been investing more money in its e-commerce platform, with CapEx spending going towards the development of an enhanced e-commerce platform, a new e-commerce fulfillment center, and new IT data center. ...
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 Adobe (ADBE) ahead of earnings.
  • to be bullish on Salesforce.com (CRM) ahead of earnings.
  • to be bearish on Hewlett-Packard (HPQ) 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.)