2014 is now well under way and earnings season is fast approaching. Most analysts are expecting the bull-market of 2013 to continue throughout 2014 with more modest gains. This week marks the beginning of the busy period where companies report their quarterly financial results. Here are the top 5 stocks to keep your eye on this week.
The information below is derived from data submitted to the Estimize platform by a set of Buy Side and Independent analyst contributors.
1. Micron Technology (MU) 1/7/13
The first major earnings release to watch for is Micron Technology who is expected to report on Tuesday. The semi-conductor company had an incredibly impressive 2013, the stock price soared from $6.60 to $21.75. In the opening days of 2014 MU has been trading slightly lower after a downgrade from outperform to sector perform from RBC Capital. Here are what Micron's earnings from the past 2 years look like.
Over the previous 4 quarters the consensus from the Estimize community has been more accurate than Wall Street 3 times. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, students, and non professional investors the Estimize community have built a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market's true expectations. According to Estimize's quantitative research, if you benchmark against the market when a company beats the Estimize consensus for EPS the stock price tends to drift upward over the next three days after the market reopens. This drift is independent of the inter-day gap that often occurs when a company reports earnings.
This quarter the Estimize community is expecting MU to report 46c EPS and $3.695B revenue while Wall Street is at 43c EPS and $3.710B revenue. The Estimize contributing analysts are forecasting less revenue, but more profit.
2. Bed Bath & Beyond (BBBY) 1/8/13
Over the past 6 quarters BBBY has beaten the Wall Street consensus on earnings 3 times and has come up short only once. Historically Wall Street has been more accurate in forecasting BBBY and the Street has them pegged at $1.15 EPS and $2.886B revenue. The aggregated earnings forecast from buy-side and independent analysts at Estimize expects BBBY to beat the Street on the top and bottom lines, the community is expecting $1.18 EPS and $2.896B revenue.
3. Monsanto Co. (MON) 1/8/13
We are seeing a large differential between the Estimize and Wall Street consensus for Monsanto this week. The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. This quarter Estimize contributing analysts are forecasting 69c EPS and $3.074B revenue. Wall Street is expecting more revenue, $3.083B, but considerably less profit at 63c.
4. Alcoa (AA) 1/9/13
The world's third largest producer of aluminum has beaten Wall Street expectations in 3 of the past 6 quarters and has only failed to meet expectations once. Estimize has been more accurate than Wall Street in 4 of the previous 6 quarters and the contributing analysts are expecting Alcoa to narrowly beat Wall Street on profit but come up marginally short on the revenue side.
The community consensus for Alcoa is 7c EPS and 5.537B revenue while Wall Street is calling for 6c EPS and $5.559B revenue.
Over the past 4 months we have seen both groups revise their revenue estimates and are converging upon a relative agreement in the range of $5.55B. The timeliness of estimates is correlated with accuracy, so these recent revisions are a good indicator that Alcoa will likely report revenue in this ballpark.
5. Family Dollar Stores (FDO) 1/9/13
Wall Street and the Estimize community are projecting very similar numbers for Family Dollar Stores. The community consensus is 71c EPS and $2.511B revenue while Wall Street is expecting 70c EPS and $2.503B revenue. Shares of FDO have fallen over the past quarter but a strong fundamentals report could get their stock back on track.