WhisperNumber.com
submits:
Baker Hughes (
BHI
), Mastercard (
MA
), and Fluor Corp. (
FLR
) are classic whisper reactors with strong upside potential when
topping the whisper number expectation.
We've seen a number of big post-earnings price moves in recent
weeks. Last month we watched as Blythe Industries (
BTH
) jumped 9.3% in just one trading day following their report,
Carmax (
KMX
) moved +8.6% in just two trading days, and Jabil Circuit (
JBL
) saw a 9.7% increase in three trading days. More recent reports
include Wells Fargo (
WFC
) moving 6.5% in just eight trading days following their report on
October 20th, while Comcast (
CMCSA
) moved a strong 6.9% in just two trading days following their
report on October 27th. All had one thing in common - they were
able to top their whisper number.
Next week there are fifteen companies reporting earnings that our
data indicates should see positive price movement if they beat the
whisper number, and negative price movement if they fall short.
We'll take an in-depth look at the three companies with the largest
expected positive price move.
Baker Hughes (
BHI
) is expected to report earnings on November 1st, before market
open. The whisper number is $0.48, two cents above the analysts
estimates. Baker Hughes has exceeded the whisper number in only 13
(50%) of the 26 earnings reports we have data, and has fallen short
in the past four out of five quarters. Over the past four years,
when the company has exceeded the whisper number, the average price
reaction is +9% in twenty-five trading days. While the track record
of beating the whisper number is only 50/50, and the whisper number
is two cents ahead of the analysts estimate (making it that much
more difficult to exceed), the expected price reaction is very
strong.
Mastercard (
MA
) is expected to report earnings on November 2nd, before market
open. The whisper number is $3.46, eight cents below the analysts
estimates. Mastercard has exceeded the whisper number in 15 (88%)
of the 17 earnings reports we have data. Over the past four years,
when the company has exceeded the whisper number, the average price
reaction is +10.5% in thirty trading days. The track record of
beating the whisper is strong, but the whisper number will be tough
to overcome, and the expected price reaction is very strong.
Fluor Corp. (
FLR
) is expected to report earnings on November 4th, after market
close. The whisper number is $0.40, nine cents above the analysts
estimates. Fluor has exceeded the whisper number in 14 (74%) of the
19 earnings reports on which we have data, including the past nine
out of ten quarters. Over the past four years, when the company has
exceeded the whisper number, the average price reaction is +8.8% in
fifteen trading days. While the expected price reaction is very
strong, and the track record of beating the whisper is strong, the
whisper number may be difficult to overcome.
These are just three of a very specific set of fifteen companies
expected to report earnings next week. These are companies that
have 'reacted' to the whisper as we would have expected - companies
that see strength when they beat the whisper, and weakness when
they miss.
But there is one significant caveat required here -
these companies also react with strong negative price movement
when they miss the whisper number.
In other words look out below if they fall short of the whisper
number expectations.
The whisper number is derived from an average of individual
investors, floor traders, investment advisors, and market
strategists expectations regarding earnings for the most recent
quarter. Companies that exceed both the whisper number (from
WhisperNumber.com) and the analysts estimate see a 2.5 times
greater positive post earnings price move than companies that only
exceed the analysts estimate but miss the whisper.
Disclosure:
No positions
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