Second-quarter earnings season kicks off today, when stocks will release their numbers from the spring. Many analysts are optimistic in outlook, with the average profit expectation at a 6% gain.
However, people are still concerned that stocks cannot move much higher without strong earnings to support them. Careful investors will also be closely following where these earnings are coming from and what companies say about their future plans.
The announcement of any new buybacks or changes to capital expenditures will help reveal how confident companies are about the next quarters and the overall strength of the economy. These insights will be closely scrutinized given the preponderance of skeptics who fear that the Fed's asset purchasing has propped up stock markets.
We decided to run a screen comprised of stocks that report during the first week of earnings season, starting on July 8th with Alcoa (NYSE:AA). This started us with a universe of about 40 stocks. We then limited that screen again by looking for companies with spikes in institutional purchasing over the last quarter. This means that the managers of pensions and hedge funds are bullish about the stock's prospects.
1. Alcoa, Inc.: Engages in the production and management of aluminum, fabricated aluminum, and alumina. Market cap at $17.43B, most recent closing price at $14.80.
Net institutional purchases in the current quarter at 64.5M shares, which represents about 5.51% of the company's float of 1.17B shares. Major Investor: Vanguard Group, Inc (The) at a 6.34% stake.
Alcoa reports earnings on Tuesday, July 8th.
2. MSC Industrial Direct Co. Inc. (NYSE:MSM): Operates as a direct marketer and distributor of Metalworking and Maintenance, Repair, and Operations [MRO] products to industrial customers in the United States. Market cap at $5.91B, most recent closing price at $94.51.
Net institutional purchases in the current quarter are at 3.3M shares, which represents about 6.47% of the company's float of 51.03M shares. Major Investor: JP Morgan Chase & Company at a 8.40% stake.
MSC Industrial Direct reports earnings on Wednesday, July 9th
3. Synergy Resources Corporation (NYSEMKT:SYRG): Engages in the acquisition, exploitation, exploration, development, and production of oil and natural gas properties primarily located in the Wattenberg field in Denver-Julesburg Basin in northeast Colorado. Market cap at $983.37M, most recent closing price at $12.98.
Net institutional purchases in the current quarter at 4.1M shares, which represents about 6.15% of the company's float of 66.64M shares. Major Investor: Bank of New York Mellon Corporation at a 4.74% stake.
Synergy Resources reports earnings on Wednesday, July 9th.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: Kapitall is a team of analysts. This article was written by James Dennin, one of our writers. We did not receive compensation for this article, and we have no business relationship with any company whose stock is mentioned in this article.