Earnings season is a great time to watch for stocks that decline after a company reports earnings or guidance that disappoints investors. Many stocks see exaggerated drops in their share price if a company "misses" earnings expectations by even a couple of pennies. Other times the earnings meet expectations, but if the company gives guidance that looks weak, it also often results in an exaggerated sell off in the stock. The reason I look for these opportunities is because stocks that are oversold often rebound quickly, sometimes in just days and this can create quick profits for traders or solid entry points for longer term investors. With earnings season in full swing, there are stocks getting major haircuts everyday for what might be just a short term earnings miss, so opportunities abound. All of the stocks below recently reported earnings and/or guidance that caused the shares to drop substantially. These stocks could rebound in the coming days and weeks:
Sohu.com, Inc. (NASDAQ:SOHU) shares are trading at $59.17. Sohu is a Internet company that operates a number of popular websites and develops multi-player games. Sohu is based in China. The shares have traded in a range between $46.35 to $109.37 in the past 52 weeks. The 50-day moving average is $64.29 and the 200-day moving average is $77.63. Earnings estimates for SOHU are $4.64 per share in 2011, and $5.73 for 2012. Sohu dropped quite a bit after releasing earnings even though profits were up. Big drops like this can create nice trading opportunities so it makes sense to buy dips and sell the rallies. Read about the earnings report here.
Anadarko Petroleum (NYSE:APC) is trading at $77.37 today. APC is one of the leading oil and gas companies, and is based in Texas. The shares have traded in a range between $57.11 to $85.50 in the past 52 weeks. The 50-day moving average is $71.66 and the 200-day moving average is $75.78. Earnings estimates for APC are at $3.43 per share in 2011, and $4.10 for 2012. The book value is about $43.13. APC pays a small dividend of 36 cents per share which gives a yield of .4%. Anadarko announced earnings which saw a rise in revenues however, a settlement related to the BP oil spill resulted in a net loss of $6.12 per share. The stock dropped and looks like a solid buy for at least a rebound trade. Read more on earnings and the settlement here.
Integra Life Sciences (NASDAQ:IART) is trading at $30. Integra is a maker of surgical implants and medical devices. These shares have a 52 week range of $29.97 and $52.90. The 50-day moving average is $37.05 and the 200-day moving average is $44.77. Estimates for IART are about $2.93 per share in 2011, and $3.28 for 2012. Even though profits beat street estimates, this stock dropped significantly when guidance did not please investors. With the stock in oversold territory and close to 52 week lows, Integra looks like a good stock to buy now on dips and then sell on a bounce.
OpenTable, Inc. (NASDAQ:OPEN) shares are trading at $43.10. OpenTable operates an online restaurants reservations system. The shares have traded in a range between $39.71 to $118.66 in the past 52 weeks. The 50-day moving average is $51.82 and the 200-day moving average is $77.70. Earnings estimates for OPEN are just $1.25 per share in 2011, and $1.69 for 2012, so the PE ratio is very high. OPEN announced earnings this week and the stock immediately fell in after-hours trading. Both earnings and guidance failed to meet expectations. This was a popular momentum stock which is now trading for about a third of its 52 week high. It could be a decent rebound play but only if it drops to about $27.
Thoratec Corporation (NASDAQ:THOR) shares are trading at $34.89. Thoratec makes a variety of specialty medical devices. The shares have traded in a range between $22.33 to $38.07 in the past 52 weeks. The 50-day moving average is about $33.64 and the 200-day moving average is about $31.10. Earnings estimates for THOR are about $1.49 per share in 2011, and $1.60 for 2012. Thoratec announced earnings after the close on Tuesday and the stock traded down in after-hours trading. The company issued downward guidance for Q4 which will probably lead to a lower stock price. If it drops enough, it could be a good short-term rebound candidate.
The data is sourced from Yahoo Finance and Stockcharts.com. The information and data is believed to be accurate, but no guarantees or representations are made. Rougemont is not a registered investment advisor and does not provide specific investment advice. The information contained herein is for informational purposes.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.