The Wendy's Company (NYSE:WEN) is expected to report fiscal fourth quarter earnings on Thursday, February 28th. The whisper number is $0.02, two cents behind the analysts' estimate. Whisper numbers range from a low of $0.00 to a high of $0.05. WEN has a 57% positive surprise history (having topped the whisper in 8 of the 14 earnings reports for which we have data).
- Beat whisper: 8 qtrs
- Met whisper: 0 qtrs
- Missed whisper: 6 qtrs
Our primary focus is on post earnings price movement. Knowing how likely a stock's price will move following an earnings report can help you determine the best action to take (long or short). In other words, we look at what happens when the company beats or misses the whisper number expectation.
The table below indicates the average post earnings price movement within a one and thirty trading day timeframe:
The strongest price movement of +6.2% comes within thirty trading days when the company reports earnings that beat the whisper number, and +3.8% within twenty trading days when the company reports earnings that miss the whisper number (positive reactor).
The table below indicates the most recent earnings reports and short-term price reaction:
The company has not seen a great deal of attention from investors over the past few years. The stock has been trading between 4.20 and 5.50 with a good amount of fluctuation. Some decent growth has been seen since November 2012 when the stock was trading at a low $4.00 range. The stock is up over 30% since then.
The company has only had a whisper number in three of the past five quarters. In the comparable quarter last year the company reported earnings in-line with the whisper number. Following that report the stock realized a 5.7% loss in five trading days. Last quarter the company reported earnings four cents short of the whisper number. Following that report the stock realized an 11.4% gain in thirty trading days. These recent reports are in-line with historical averages.
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Since 1998, WhisperNumber.com has been tracking and publishing "crowd sourced estimates" for earnings. We call these earnings expectations whisper numbers. Our whisper numbers are gained from individual investors and traders just like you that have registered with our site. While the whisper number itself is an important part of our analysis, a company's "price reaction" to beating or missing the whisper number expectation is the key. On average, companies that exceed the whisper are "rewarded," while companies that miss are "punished" following an earnings report.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.