Trade the Earnings: Constellation Brands

Apr. 7.11 | About: Constellation Brands, (STZ)

Constellation Brands (NYSE:STZ) is due with its quarterly earnings report in the extended-hours today. We track how stocks react to earnings events in the after-hours and look for patterns that develop where stocks may add to their after-hours movement or reverse direction in the next day's regular session.

STZ has legs as a long play if it should pop higher in extended-hours trade in reaction to its quarterly results. The stock has seen an earnings-driven after-hours gain in four of the last 12 quarters tracked in our MT Pro database. Also, 75.0% of the time (3 out of 4 times) the stock followed through in the same direction by the close of the next day's regular session compared to the Extended Hour's "effective close." When it followed through, the price closed further in the same direction on average by 1.7% (in 3 events) from the "effective close."

Last 12 Qtrs Positive and Negative Price Reactions

Same: 60.0% of the time (6 out of 10 times) this stock followed through in the same direction by the close of the next day's regular session compared to the Extended Hours "effective close." When it followed through, the price closed further in the same direction on average by 3.9% (in 6 events) from the "effective close."

Reverse: 40.0% of the time (4 out of 10 times) this stock reversed in the opposite direction by the close of the next day's regular session compared to the Extended Hours "effective close." When it reversed, the price closed in the opposite direction on average by 3.2% (in 4 events) from the "effective close."

Last 12 Qtrs Positive Only Price Reactions

Same: 75.0% of the time (3 out of 4 times) this stock followed through in the same direction by the close of the next day's regular session compared to the Extended Hours "effective close." When it followed through, the price closed further in the same direction on average by 1.7% (in 3 events) from the "effective close."

Reverse: 25.0% of the time (1 out of 4 times) this stock reversed in the opposite direction by the close of the next day's regular session compared to the Extended Hours "effective close." When it reversed, the price closed in the opposite direction on average by 1.2% (in 1 events) from the "effective close."

Last 12 Qtrs Negative Only Price Reactions

Same: 50.0% of the time (3 out of 6 times) this stock followed through in the same direction by the close of the next day's regular session compared to the Extended Hours "effective close." When it followed through, the price closed further in the same direction on average by 6.0% (in 3 events) from the "effective close."

Reverse: 50.0% of the time (3 out of 6 times) this stock reversed in the opposite direction by the close of the next day's regular session compared to the Extended Hours "effective close." When it reversed, the price closed in the opposite direction on average by 3.8% (in 3 events) from the "effective close."

Last 4 Qtrs Positive and Negative Price Reactions

Same: 50.0% of the time (2 out of 4 times) this stock followed through in the same direction by the close of the next day's regular session compared to the Extended Hours "effective close." When it followed through, the price closed further in the same direction on average by 3.8% (in 2 events) from the "effective close."

Reverse: 50.0% of the time (2 out of 4 times) this stock reversed in the opposite direction by the close of the next day's regular session compared to the Extended Hours "effective close." When it reversed, the price closed in the opposite direction on average by 4.6% (in 2 events) from the "effective close."

Last 4 Qtrs Positive Only Price Reactions

Same: 100.0% of the time (1 out of 1) this stock followed through in the same direction by the close of the next day's regular session compared to the Extended Hours "effective close." When it followed through, the price closed further in the same direction on average by 0.4% (in 1 event) from the "effective close."

Reverse: 0.0% of the time (0 out of 1) this stock reversed in the opposite direction by the close of the next day's regular session compared to the Extended Hours "effective close." When it reversed, the price closed in the opposite direction on average by 0.0% (in 0 events) from the "effective close."

Last 4 Qtrs Negative Only Price Reactions

Same: 33.3% of the time (1 out of 3 times) this stock followed through in the same direction by the close of the next day's regular session compared to the Extended Hours "effective close." When it followed through, the price closed further in the same direction on average by 7.1% (in 1 events) from the "effective close."

Reverse: 66.7% of the time (2 out of 3 times) this stock reversed in the opposite direction by the close of the next day's regular session compared to the Extended Hours "effective close." When it reversed, the price closed in the opposite direction on average by 4.6% (in 2 events) from the "effective close."

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.