Earnings reactions and over reactions

Now here is a sample list of stocks I have put in my database to track for next one month from past few days of earning releases. This is in addition to database of good earning/sales companies and companies with accelerating earning.

I have positions in some of these. For example look at LNN, I entered on earnings, in few days it is up over 15%. Similarly you can find many plays using earning on both long and short side.

These companies had a high volume reaction at or near top of their range post earnings. So market likes their earning. Not all of them will go up but if some offer low risk entry in few weeks a volume breakout on some of these is what I will look at buying. I keep adding to this list everyday and keep dropping companies which do not react in few weeks.

In my experience of tracking earnings for last 25 quarters, earnings kick off some of the most enduring rallies I have seen. Behind a major move in a stock (making 300 to 1000% move in few years) is somewhere a earning/sales acceleration. You get very good reward for little risk if you can spot it before street spots it in an unknown little company with low float, just about to start on its growth phase.Some rally just for few weeks while some rally for years. The worst kept secret on Wall Street is earnings matter, anyone else who tells you otherwise is either a fool or selling you newsletter service or a TV pundit or a perma bear or a conspiracy theorist.

AAPL,Apple Computer Inc
ADS,Alliance Data
ALB,Albemarle Corp
AMR,Amr Corporation
APH,Amphenol Corp
ARNA,Arena Pharmaceuticals
ASYT,Asyst Technologies Inc
AVCT,Avocent Corporation
B,Barnes Group Inc
BCR,C.R. Bard Inc
CBST,Cubist Pharmaceuticals
CPSS,Consumer Portfolio Svcs
ETN,Eaton Corp
GAP,Great Atlantic & Pacific Tea Company Inc
GWW,W.W. Grainger Inc
IBM,International Business Machines Corp
ILMN,Illumina Inc
IONA,Iona Technologs Plc Adr
JAKK,Jakks Pacific Inc
JKHY,Jack Henry & Associates
JNJ,Johnson & Johnson
JNPR,Juniper Networks
LOGI,Logitech Intl Adr
MAN,Manpower Inc
MAT,Mattel Inc
MEDX,Medarex Inc
MGI,Moneygram International
MHP,Mcgraw-Hill Companies
MTOX,Medtox Scientific
NDAQ,Nasdaq Stock Market Inc
NVEC,Nve Corp
NVS,Novartis Ag Ads
PJC,Piper Jaffray Companies
PLXT,Plx Technology Inc
RBN,Robbins & Myers Inc
ROG,Rogers Corp
SLGN,Silgan Holdings Inc
SNBC,Sun Bancorp Inc Nj
SYK,Stryker Corp
SYNA,Synaptics Inc
SYNT,Syntel Inc
TGIS,Thomas Group Inc
UNH,UnitedHealth Group Inc.
USAP,Universal Stain & Alloy
VIGN,Vignette Corporation

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2 comments:

Unknown said...: I put your list on a watch list today and noticed SYNA blasting off on not that great news. Earnings are down Y over Y but did beat estimates and they guided up. With 13% of the float short I would say this was a classic Short Squeeze or do you think this has further to go?; Oct 20, 2006, 4:04:00 PM
Pradeep Bonde said...: Don't see much upside. The real rockets have positive earnings plus significantly higher sales growth. Might make 10-20% move but I prefer to concentrate on those likely to make 100% plus kind of moves. I don't see this making that kind of move. IMHO; Oct 20, 2006, 4:19:00 PM

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