Seeking Alpha
Event-driven, short-term horizon, long/short equity, special situations
Profile| Send Message|
( followers)  

Monsanto Company (NYSE:MON) is expected to report fiscal second-quarter earnings on Wednesday, April 3. The whisper number is $2.58, in line with analysts' estimates. MON has a 74% positive surprise history, having topped the whisper number in 23 of the 31 earnings reports for which we have data.

Earnings History

  • Beat whisper: 23 quarters
  • Met whisper: 1 quarter
  • Missed whisper: 7 quarters

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 30-trading day time frame:

Click to enlarge images.

The strongest price movement of +3.2% comes within 20 trading days when the company reports earnings that beat the whisper number, and +8.4% within 30 trading days when the company reports earnings that miss the whisper number (positive reactor). The average price reaction (to the whisper number) is consistent (positive) through 30 trading days when the company reports earnings.

The table below indicates the most recent earnings reports and short-term price reaction:

In the comparable quarter last year, the company reported earnings 14 cents ahead of the whisper number. Following that report, the stock realized a 9.8% loss in five trading days. Last quarter, the company reported earnings 24 cents ahead of the whisper number. Following that report, the stock realized a 3.1% gain in 10 trading days. Overall historical data indicates the company to be (on average) a positive price reactor following earnings.

Enter your expectations and view more earnings information here, or let us know your expectation in the comments section below. 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 who 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 number are "rewarded," while companies that miss are "punished" following an earnings report.

Source: Whisper Number Impact: Earnings Preview For Monsanto