by Traders Reserve | May 1, 2012 1:50 pm
Three individual stocks are set to report earnings tomorrow, each with the potential to add to your portfolio. When trading on earnings news, the goal is to book a tidy profit and look to your next move rather quickly.
As with the gains in stocks, the downside risk for individual names remains high. The trigger for a potential collapse in share value is also likely to be earnings. If expectations are not met, the market typically adjusts its future outlook and valuation of a particular name.
The corrections can be fast and furious creating a wonderful trading opportunity for those looking exclusively at earnings reports as a way to get into a stock at a distressed price.
Here are the stocks and earnings we are looking at for the near term:
GPS company Garmin (NASDAQ:GRMN) reports results for the quarter ending March 31, 2012 on Wednesday before the market opens. Wall Street expects Garmin to earn 41 cents per share in the quarter.
That estimate has held steady over the last 90 days. The company has exceeded estimates in three of the last four quarters. Garmin shares have added 37% in the last year. Analysts expect profits to drop slightly in 2012. At current prices, shares trade for 17 times 2012 estimated earnings.
ValueClick (NASDAQ:VCLK),an online marketing company, reports results for the quarter ending March 31, 2012 on Wednesday after the market closes.
Wall Street is expecting the company to earn 24 cents per share in the period. That estimate has held steady over the last 90 days. ValueClick has exceeded estimated earnings in each of the last four quarters. ValueClick shares have gained 26% in the last 12 months. Analysts are expecting profits to drop slightly in 2012. At current prices shares trade for 18 times 2012 estimated earnings.
Stone-cold earnings trade of the week: With analysts projecting ValueClick profits to stall in 2012, shares are quite overvalued as we head to the earnings report on Wednesday. While the company has exceeded estimates in each of the last four quarters, look for that trend to stall. Shares in the last year have moved steadily higher, but have appeared to plateau.
Organic grocer Whole Foods (NASDAQ:WFM) reports results for the quarter ending March 31, 2012 on Wednesday after the market closes. Wall Street is expecting WFM to make 59 cents per share in the quarter. That estimate is a penny per share higher than 90 days ago.
The company has exceeded estimates in each of the last four quarters, and shares of Whole Foods have gained more than 30% in the last year. Analysts are expecting profits to grow by 15% from the current fiscal year ending Sept. 30, 2012, to the next. At current prices, shares trade for 36 times current fiscal year estimated earnings.
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