Report Card Season is Open
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Now back to regularly scheduled top pick…
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 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.
Welcome to Theta Bandits Top Pick Tuesday. We strive to bring you relevant free content, scouring the markets and making plans to get ahead of what we think could be new potential winners in any portfolio. This week we are highlighting a few names reporting this week that we will be watching and why.
Opinion
One set of stocks that is tracked by analysts closely and makes up a large percentage of the weight of the index is known as the Magnificent 7, which in alphabetical order includes: AAPL, AMZN, GOOG, META. MSFT, NVDA and TSLA. For this week of July 29th, 2024, there are four of the Magnificent 7 reporting and related to one of the stocks (NVDA) are a few other names reporting, leading to a big week for earnings.
Included in the visual guide below, the Magnificent 7 names reporting have been circled in red and circled in blue are the names that are related to NVDA as they are in the semiconductor sector.
- Magnificent 7 reporting: MSFT, META, AMZN, AAPL.
- Semiconductors reporting : ON, AMD, ARM, QCOM, LRCX, INTC.
These are the BIG names in the technology sector with GOOG and TSLA reporting last week and NVDA set to report on August 28th, 2024. The names listed are heavy into leveraging the AI opportunity in terms of providing the chips for the devices we use or the software of the apps that are a part of our everyday activities. MSFT and AMZN will also be competing for who tops the cloud between the growth of Azure vs AWS.
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:
- If the stock rallies: there is nothing wrong with securing profit.
- If the stock declines: re-evaluate the 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.
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RISK
The goal is to grow capital by securing profits along the way and limiting losses. 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 positions as ER season is usually very volatile.
If you’ve been finding our picks helpful, imagine what the live version holds. You know what to do 👇
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.
