Trade the Earnings: Buckeye Partners, L.P.
Earnings Release Date: 11/01/2013
Avg. Extended-Hours Dollar Volume: $28,568,276
Earnings Sensitivity (up or down): 1.6%
Buckeye Partners, L.P. ( BPL ) is due to issue its quarterly earnings report before market open today. Given its history, traders can expect very active trading in the upcoming Premarket session immediately following the company's release of its quarterly earnings. An analysis of historical premarket and after-hours trading activity and liquidity conditions in BPL following an earnings release indicates that the price change in the extended hours is likely to be of limited value in forecasting additional price movement in the following regular session.
Analysts at MT Newswires have tracked how BPL's stock price has reacted to quarterly earnings events the past both in the after-hours and following regular session. The result of that study is below.
Over the last year, when shares of BPL rose in the extended-hours session in reaction to its earnings announcement, history shows that 25% of the time (1 out of the last 4 quarters) the stock posted additional gains in the following regular session by an average of 5.20%.
Over the last year, when shares of BPL dropped in the extended-hours in reaction to its earnings announcement, there is limited evidence to suggest a follow-through in the same direction the next day.
Our analysis of over a decade of company specific earnings related news and price data on over 5,000 US companies demonstrates that earnings event related trading opportunities can exist for those trading in the after-hours and premarket sessions. Certain stocks demonstrate a historical tendency to either underprice or overreact to earnings news in the extended-hours (the time when companies typically release earnings) relative to the following regular session close.