Report Card Season is Open
What are they
Earnings Reports, often abbreviated as ERs, are a crucial aspect of the financial markets that investors and traders alike eagerly await. These reports are released quarterly and provide detailed insights into the company’s financial performance during the past quarter. They include essential metrics such as revenue, earnings per share (EPS), profit margins, and sometimes forward-looking guidance from the company’s management. Earnings Reports serve as a vital tool to assess a company’s health, growth trajectory, and overall prospects. The market’s reaction to these reports can be significant, with stock prices often experiencing notable fluctuations based on whether the results exceed, meet, or fall short of expectations. Consequently, navigating the earnings season requires careful analysis, strategic planning, and swift decision-making to capitalize on opportunities and mitigate risks.
This week at Theta Bandits, we are bringing a look at who is reporting this week and highlighting stocks we will be watching – let’s check it out!
Opinion
Included in the visual guide below, there are a few names which you might find familiar if you have been keeping up with our Top Pick Tuesdays. Namely: TSLA, VALE, MO, XOM. Others reporting which are not to be ignored would include:
- Technology Sector: META, MSFT, GOOG.
- Defense Sector: LMT, RTX.
- Gold Sector: AEM.
Why are these 10 important names to keep on a list? The first four have been highlighted here before and we invite you to read or re-read what we thought before. The Market has been very volatile in the last few weeks, giving good opportunities to evaluate current prices and pick away at those names on weakness.
There are BIG names in the technology sector leveraging the AI opportunity in terms of providing the software tools that are customer facing or built into our everyday activities through META, MSFT and GOOG.
In the defense sector, given the geopolitical risk around the world, these names are two of the most well-known names in this sector.
For the Gold Sector, the price of Gold had recently crossed above $2400 USD per ounce, which is roughly a $300 move since the beginning of the year, so it would be interesting to see how the gold miners like AEM are using this opportunity.
Plan
The volatility around ER’s is very scary. This is a suitable time to review your portfolio and potentially take advantage of odd behaviour in the market after the results have been released. Here are three potential scenarios to look for:
- The stock rallies, there is nothing wrong with securing profit.
- The stock declines, this will need a re-evaluation of your position in your portfolio and make sure your thesis for the trade is still intact. Manage your position and follow your risk profile that you laid out when planning your entry.
- A company may have a great ER, but the market does not agree, and the stock reacts negatively. This could potentially provide an opportunity to pick up shares on weakness and lower the cost basis of your position in your portfolio.
As always, make sure to plan your trade with-in your risk tolerance and give the trade the time required to be successful, while setting and updating limits to mitigate risk and setting exit points for your position, as necessary because some of the above points can come up very fast during ER season.
For more content consider our Theta Bandits Discord community, a hub for traders to ask questions, share ideas and strategies to approach the above and various other tickers daily. Traders in this community could potentially attack tickers using a variety of methods discussed in previous Top Pick Tuesdays.
Disclaimer: This article is for informational and educational purposes only, not investment advice. We recommend researching and consulting with a financial advisor before making investment decisions. All actions based on this information are at your own risk.
