PDL BioParma (NASDAQ:PDLI) is expected to report fiscal fourth earnings on Friday, March 1st. The whisper number is $0.34, two cents ahead of the analysts' estimate. PDLI has a 67% positive surprise history (having topped the whisper in 10 of the 15 earnings reports for which we have data).
- Beat whisper: 10 qtrs
- Met whisper: 1 qtrs
- Missed whisper: 4 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 +9.4% comes within thirty trading days when the company reports earnings that beat the whisper number, and +8.4% within ten 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 having only two whisper numbers in the past eight quarters. This is surprising considering the amount of growth the stock has seen for most of that period. After hitting the $8 range in October 2012 the stock started a decline to today's levels at around $7.
In May 2012, the company reported earnings two cents ahead of the whisper number. Following that report the stock realized a 1.1% gain in after hours trading, and added an additional 2.6% in five trading days. In August 2012, the company reported earnings seven cents ahead of the whisper number. Following that report the stock realized a 3.3% gain in after hours trading, and added an additional 6.5% in twenty trading days. These recent report moves are in-line with historical averages indicating the stock tends to see a positive price move following earnings.
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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.