The earnings season kicks into full swing this week with the biggest names in the medical device industry stepping in to the on-deck circle. Traders can expect modest bottom line growth from these companies as incremental revenue has been harder and harder to come by. Here are four trades to consider in the coming days.
On Wednesday after the market close, Stryker Corporation (SYK) will release its Q3 earnings. The consensus among analysts is that the company will announce a 7.7% year-over-year uptick in EPS on a 2.0% improvement in total revenue. The company notched similar games last quarter as it benefitted from increased volume and acquisitions.
The 50-day moving average of this stock has been hovering above the 200-day moving average, but the gap has narrowed as Stryker shares have pulled back during the month of October. This is a name I would look to buy after the numbers come out -- not before. The slightest miss here could lead to a major setback for short-term traders if the stock price breaks below $53.50.
Also slated to reports its results on Wednesday is St. Jude Medical, Inc. (STJ). Wall Street is calling for a 3.8% upswing in EPS versus the prior year quarter. Total revenue is expected to decline by 3.1% however. This stock is a more attractive trade heading into the earnings release. St. Jude has surprised to the upside in each of its last four quarters and the stock price saw a moving average crossover when the 50-day moving average topped the 200-day moving average earlier this month.
Before the opening bell on Wednesday, Abbott Laboratories (ABT) will announce the results of its Q3. Analysts are predicting that the company will report an 8.9% increase in EPS on a 2.7% gain in total revenue when compared to the prior year quarter.
This is a name that I believe can be safely purchased prior to the release. The stock has steadily grinded higher for much of the year and sits 23.2% above where it began the year. Its 50-day moving average has steadily pulled away from the 200-day moving average for much of the year.
One other name for traders to watch for in the coming days is Boston Scientific Corporation (BSX). Wall Street is looking for EPS of $0.11 versus $0.12 in the prior year quarter when the company reports on Thursday morning. Total sales are expected to decline by 4.4%. The depressed expectations are already baked into the stock price and the company has a history of surprising to the upside. This one is worth a second look as well.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. Written by Billy Fisher for Stock Traders Daily.