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Which Stocks Look Ready to Surge and Sink 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 Whole Foods (WFM), STEC (STEC), Sodastream (SODA), J.C. Penney (JCP), Qualcomm (QCOM), NVIDIA (NVDA), Nordstrom (JWN), Groupon (GRPN) and Monster Beverage (MNST).

Here is just a tiny sample of what BullMarket.com wrote about Whole Foods: Whole Foods has beaten analyst EPS estimates each quarter over the past two years. Over that stretch, the stock has risen the next session seven of eight quarters. Seasonally, the stock has risen twice in the last four years.

Last quarter, the high-end grocer reported a profit of $116.8 million, or 63 cents per share, up from $88.5 million, or 50 cents per share, a year earlier.

Revenue climbed to $2.7 billion from $2.4 billion as same-store sales jumped 8.2%.

Analysts had been expecting EPS of 61 cents.

The company raised its full-year guidance to $2.51-$2.52 a share from $2.44-$2.47. Analysts were expecting a profit of $2.46 a share. The company expects same-store sales to increase 6.5%-8.5%. Whole Foods forecast a 2013 profit of $2.83-$2.87 a share, which bracketed the $2.84 consensus. ...

Outside of earnings, Whole Foods is a very strong company that will continue to benefit from the public's embrace of natural and organic foods. Whole Foods already does very well with the Baby Boom generation because as its members age they have become more health conscious. It also does well with younger buyers that were raised eating natural foods and thus aren't converts.

The company has a long way to go to reach its goal of 1,000 stores, and we like its strategy of taking advantage of depressed real estate prices to broaden its footprint. Those new stores will only add to margins that are the envy of the grocery industry, especially since Whole Foods' more-affluent customer base willingly absorbs its higher price points. As we've also noted in prior reports, for all the talk of food cost inflation, Americans spend on average just 8% of their household income on food, compared with 15% in the 1970s and nearly 50% a century ago. ...
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 were:

  • to be bullish on Priceline.com (PCLN) ahead of earnings.
  • to be bullish on Starbucks (SBUX) ahead of earnings.
  • to be bearish on First Solar (FSLR) 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.)