The J.M. Smucker Co. (SJM), the processed food company known best for its jellies and jams, is a stock you should keep your eye on heading into its earnings report, which is scheduled for Friday Nov. 20.
Despite the economic slowdown, consumers continue to purchase coffee, juices, peanut butter, fruit spreads and most every other product SJM produces. That’s why the company has reported earnings growth for the past five quarters.
What’s more, SJM has blown out the past two earnings reports by 15% and 62%, resulting in an average one-day move of 7% in the share price following these announcements. In fact, the stock has gapped sharply higher on those days.
SJM’s chart shows the stock is bouncing nicely off its 100-day moving average. The uptrend of the past week has taken out the 20-day and 50-day moving averages as well.
But SJM has a formidable challenge ahead — the $55 level, which marked tops in August and October. It’s also the site of peak open interest in the November option series.
Like I said, SJM reports earnings Friday Nov. 20, before the open. So there’s plenty of time for the stock to take out the $55 level.
A breakout would make a pre-earnings play much more attractive.
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