Aftermath - The Earnings Plays/Watch List Hall of Fame.. Statisical Analysis (long post)
I've been conducting a rather interesting follow up and statisical analysis of the progression for the most part of our earnings plays, and less so, our watch list picks . I am doing it to see if there are ways to predict which of the plays are 'designated' for the earnings plays 'Hall of Fame'.
I noticed several things. A large of our earnings undergo one or more of the the following:
They get upgraded, bought by institutions, break through important resistance levels, break out of basing patterns that have lasted as much as 3-4 months etc. One of the best way to gauge their progress is to check out Investor's Business Daily regularly.. Our stocks appear in the following areas consistently and in these time frames:
a) AFTER appearing in the newsletter and BEFORE reporting earnings
b) AFTER appearing in the newsletter/watch list a day or two AFTER earnings come out.) The point being that the stocks appear in our stock selection newsletter or watch list FIRST.
I. The New America Page of Investor's Business Daily:
Tuesday's February 15,New America Page. Ocular Sciences (OCLI) in February 11, 1999's New America Page,
Furniture Brands (FBN) in the New America Page on February 9, weeks after being an earning play "Furniture Brands is the larges home furniture make with three of the most recognized brands in the U.S. Thomasville, Broyhill and Lane. ..so far the company's expansion
Abercrombie & Fitch is as example of a stock appearing in the New America Section (Tuesday, 16 February) of the Investor's Business Daily BEFORE earnings are out and AFTER being given the distinction of 'earnings play'..
Tricon Global (YUM)...efforts have proved successful. In the fourth qurater, earnings climbed 31% to 46 cents a share. Sales rose 5.1 % ot $497.5%.
Almost every week I post some stocks that have been in Investor's Business daily after making it to our lists.
Here are some more earnings plays that made it to the New America Page AFTER we covered it. IBI, DRTE, ELNK, PLCE, CHCS, BVSN, AXNT, LSON, JVLN, BRYO, GNSS (Genesis Microchip), OTEXF,SALT, PYX, QKZ, RFMD, SYKE, MBRS, MXTR, MMCN, ELNK, NSOL, NMGC, NSTA, GNET, AMWD (American Woodmark), CLFY, MYSW (My Software), LIN
Another are where you will the earnings plays after they report are:
II Earnings News ..BEST UPS section of Investor's Business Daily: The examples are too numerous to attempt to re-print.. But almost daily we have our picks in the top 20 and even in the top five for percentage EPS gain:
WCOM in February 12th section 8th place
JCOR " " " 10th place
YUM 15th place
KEA 16th place
Earnings News Best Ups on Monday February 8th:
IDXX First place
TACO Cabana Second Place
Earnings News Best Ups Wednesday, February 10th:
PYX was in third place
KSWS was in fourth place
Earnings News Best Ups Thursday February 11th
SNC was in sixth place
GIC was in seventh place
CTSH was in eighth place
IEE was in 18th place and other in top 25 were SFSK, SCAI, JNY,
Earnings News Best Ups Wednesday February 10, 199
MMWW was in eighth place
and EMPI, FM, MAST, ACCOB, SYKE, were in the top 25.
Another area our earnings plays and/or Watch list plays appear AFTER they are on our lists are:
III NASDAQ Stocks in the News Section
of Investor' Business Daily: (area where stocks have greatest increase in volume, EPS growth, rose up to from a basing period (can result in further increase of 5-15% rather quickly or even more)
Monday February 8th, JCOR Communications: ... hit a new high of 73 1/8 before closing down.. Jacor's net profit in 1998 is forecast to improve 25% to 10 cents a share, annual cash flow per share has risen every year since 1993 and was $1.68 in 1997, up 156% from a year earlier
SONE, Security First Technologies, in Wednesday, February 10, 1999
...rose 2 3/4 breaking out of a seven week base on double average volume. .. Late Monday, the company met estimates ... Sales growth has accelerated over the past two quarters, from 58% to 127% to 184%. Wall Street expects Security First to turn profitable i 2000 with a net of 45 cents a share.
Express Scripts (from the watch list) ...the firm has enjoyed steady earnings growth of between 23% and 38% for the past 12 quarters. Analysts see net growing 28% to $1.29 a share in 1998 and 32% to $1.70 in 1999.
KCP Kenneth Cole Productions (Thursday February 11th paper)
Annual net has increased since 1991 and Wall Street analysts look for a 31% jump to $1.19 a share for 1998. [ed. comment this was for the watch list a few days before and is now an 'official' earnings play for the week of February 22-26th]
IV Companies in the News Section of IBD..
Some of our earnings plays get there usually AFTER they report. But the main point is that if they are not featured they are included in the small area right below the feature article for the top 21 of that industry sector. Our earnings plays appear there more consistently.
This area is reserved for the top 10 in the entire Industry Group. National Data, a company I've been invested in since July of 1998, is now ranked #5 out of the top 21 making up the Computer - Services Industry group.
Thursday February 11, FDC is the feature article and FDC has been an earnings play, a watch list pick and a stock I've mentioned on numerous occasions as being poised for great groth.
V. A fifth are is the "Fund Family Focus"
This is where the top mutual ffunds placing their bets. Here again is an area reserved for the more 'elite' of the earnings plays and watch list picks.. Appearing in that area was earnings plays like SFSK, FBN, TYC, TOM,GUC, SPLS. They also like to get into 'new sectors' and areas of strength. Last week a mutual fund declared that about some of my favorites (JCOR, CCU, COX)
...we are long term holders of what we call core holdings, and we surround those with orpportunity ideas or sectors. Some of the ones they added were JCOR, CCU, COX,Tyco..
Here in a article from February 12, 1999. Knight Trimark a stock appearing frequently and consistently in our watch lists:
Knight Trimark is one of the hottest stocks in the market. It boasts a99 rating for both its EPS rating and RS. The stock came public at 14 1/2 last July. It ran up to a peak of 64 1/2 in January, but has since backed off to 38 7/8 and is basing. Profits should rise 35% this year. More institutional buys were recorded in : ANF, GPS, and SPLS.. all watch list and earnings plays picks..
VI. Earnings Plays are upgraded ... A relatively large amount of our earnings plays also enjoy upgrades since their report I'm now in the process of researching this in a stock by stock basis. KSWS, CMVT, SLR, SDLI, AVID, WPSN, GNET, are only a tiny portion of the list.
Of course all the above is by means the way things turn out for all the earnings plays. They are usually the ones that have triggered 'buy' signals, have been mentioned as early breakout signals and have shown anticipatory upswing (this being the most important prognostication of future stock acceleration). It is though a good amount of them. Some just die out but fortunately they almost never have 'anticipatory upswing' or provide any reason to enter these stocks.
parts of articles above reprinted courtesy of Investor's Business Daily |
