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Knowing how likely a stock's price will move following an earnings report will help you make better trades. Many investors believe that beating or missing the whisper number has the greatest impact on stock movement. If the number is exceeded, the stock is rewarded and prices move higher. If the number is missed, the stock is punished and prices move lower. Unlike the analysts' estimate, our 'whisper number' has actually been proven to have a greater impact on stock movement.

Expected earnings reports and the whisper number impact for November 2nd, 2011:

Comcast (CMCSA) reports earnings Nov. 2nd, before market open. The whisper number is $0.44, four cents ahead of the analysts estimate. Comcast has a 67% positive surprise history (having topped the whisper in 14 of the 21 earnings reports for which we have data). The average price movement within ten trading days of these twenty-one earnings reports is -1.4%. The strongest price movement of -7.1% comes within twenty trading days when the company falls short of the whisper number, and +4.2% in thirty trading days when topping the whisper. Last quarter the company reported earnings in-line with the whisper number.

Mastercard (MA) reports earnings Nov. 2nd, before market open. The whisper number is $4.85, three cents ahead of the analysts estimate. Mastercard has a 95% positive surprise history (having topped the whisper in 20 of the 21 earnings reports for which we have data). The average price movement within ten trading days of these twenty-one earnings reports is +1.6%. The strongest price movement of -5.4% comes within one trading day when the company falls short of the whisper number, and +4.4% in thirty trading days when topping the whisper. Last quarter the company reported earnings fifty-six cents ahead of the whisper

number.

Clorox (CLX) reports earnings Nov. 2nd, before market open. The whisper number is $0.96, three cents ahead of the analysts estimate. Clorox has an 80% positive surprise history (having topped the whisper in 16 of the 20 earnings reports for which we have data). The average price movement within ten trading days of these twenty earnings reports is +0.4%. The strongest price movement of -0.2% comes within five trading days when the company falls short of the whisper number, and +2.5% in thirty trading days when topping the whisper. Last quarter the company reported earnings eight cents ahead of the whisper number.

Time Warner (TWX) reports earnings Nov. 2nd, before market open. The whisper number is $0.76, in-line with the analysts estimate. Time Warner has a 55% positive surprise history (having topped the whisper in 22 of the 40 earnings reports for which we have data). The average price movement within ten trading days of these forty earnings reports is +0.1%. The strongest price movement of -1.9% comes within five trading days when the company falls short of the whisper number, and +1.7% in twenty trading days when topping the whisper. Last quarter the company reported earnings two cents ahead of the whisper number.

Cognizant Tech Solutions (CTSH) reports earnings Nov. 2nd, before market open. The whisper number is $0.73, two cents ahead of the analysts estimate. CTSH has a 65% positive surprise history (having topped the whisper in 17 of the 26 earnings reports for which we have data). The average price movement within ten trading days of these forty earnings reports is -0.9%. The strongest price movement of -0.4% comes within one trading day when the company falls short of the whisper number, and -2.9% in twenty trading days when topping the whisper. Last quarter the company reported earnings in-line with the whisper number.

When analyzing the data we collect, the most important aspects are how a company reacts to beating or missing the whisper number, the average post earnings price movement, and in what timeframe (see link in profile to receive alerts). Keep in mind that trading on whispers is a technical play on market psychology, rather than a bet on a company's fundamental strengths.

A company's 'reaction' to the whisper number expectation is the key - on average companies that exceed the whisper are 'rewarded', while companies that miss are 'punished' following an earnings report.

According to the Wall Street Journal, "the percentage of companies that have beaten expectations often is cited as a barometer of corporate profitability, an indicator of how well the economy as a whole is doing or a predictor of where the stock market is going. What goes unsaid, however, is that these positive surprises are becoming so common they are nearly universal. They are predetermined in a cynical tango-clinch between companies and the analysts who cover them. And there is no reliable evidence that the stock market as a whole will earn higher returns after periods with more positive surprises."

"In short, there isn't anything surprising about earnings surprises. They aren't the exception; they are the rule. "All the numbers are gamed at this point," says James A. Bianco, president of Bianco Research."

Whisper numbers provide the unbiased earnings expectation proven more significant than the analysts estimates.

All trading involves risk and the information presented is not intended to be a recommendation of any kind.

Source: Whisper Number Impact: Earnings Preview For Nov. 2nd