Bad News Priced In? 5 Companies Reporting Next Week, Dragged Down by Extreme Pessimism

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 |  Includes: DPS, ETR, HES, MSI, TMO
by: Kapitall

As we enter another week of Q1 earnings results, we wanted to give you a few ideas of what to look for when preparing your watchlist.

The sentiment surrounding a name is particularly interesting because it can give an indication of whether earnings surprises are possible, that is, if the sentiment is strong in either direction.

With that in mind, we screened the companies on next week’s roster for those that have seen significant institutional selling over the past quarter. Then we narrowed down that list by searching for those that have also seen an increase in shorts month-over-month.

Do you think these companies could post positive earnings surprises, shifting their bearish lean? Use this list as a starting-off point for your own analysis into the reporting companies.

List sorted by institutional shares sold as a percent of float.

1. Motorola Solutions, Inc. (NYSE:MSI): Communication Equipment Industry. Market cap of $14.81B. Earnings to be released on 4/28/11. Net institutional shares sold over the current quarter at 12.8M, which is 3.82% of a 334.90M share float. Shares shorted have increased from 5.90M to 8.63M month-over-month, which is an increase representing 0.82% of share float. The stock has lost 9.25% over the last year.

2. Dr Pepper Snapple Group, Inc. (NYSE:DPS): Beverages Industry. Market cap of $8.59B. Earnings to be released on 4/27/11. Net institutional shares sold over the current quarter at 8.5M, which is 3.80% of a 223.75M share float. Shares shorted have increased from 5.88M to 6.14M month-over-month, which is an increase representing 0.12% of share float. The stock has gained 18.07% over the last year.

3. Entergy Corporation (NYSE:ETR): Electric Utilities Industry. Market cap of $12.0B. Earnings to be released on 4/29/11. Net institutional shares sold over the current quarter at 6.3M, which is 3.53% of a 178.47M share float. Shares shorted have increased from 2.08M to 2.65M month-over-month, which is an increase representing 0.32% of share float. The stock has lost 14.46% over the last year.

4. Hess Corporation (NYSE:HES): Oil & Gas Refining & Marketing Industry. Market cap of $26.66B. Earnings to be released on 4/27/11. Net institutional shares sold over the current quarter at 7.5M, which is 2.47% of a 303.71M share float. Shares shorted have increased from 2.96M to 3.42M month-over-month, which is an increase representing 0.15% of share float. After a solid performance over the last year, HES has pulled back during recent sessions. The stock is 3.13% below its SMA20 and 2.96% below its SMA50, but remains 15.77% above its SMA200. The stock has gained 22.08% over the last year.

5. Life Technologies Corporation (NASDAQ:LIFE): Biotechnology Industry. Market cap of $9.36B. Earnings to be released on 4/26/11. Net institutional shares sold over the current quarter at 3.6M, which is 2.04% of a 176.07M share float. Shares shorted have increased from 3.94M to 4.85M month-over-month, which is an increase representing 0.52% of share float. The stock has lost 2.02% over the last year.

*Institutional data sourced from Fidelity, short data and share float sourced from Yahoo! Finance, earnings date and all other data sourced from Finviz.

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