Below are five companies set to report earnings this week and what to expect from the reports.
- Lennar Corporation (NYSE:LEN): Following a strong fourth quarter earnings report in which shares jumped nearly 7%, the company's report may involve a few more surprises this time around. With home sales depreciating for two straight months and KB Homes (NYSE:KBH) already falling victim to the renewed housing worries, a beat by Lennar would be rather surprising and, frankly, not worth the risk.
- McCormick and Company (NYSE:MKC): The manufacturer for spices and herbs may see a strong quarter as customers have flocked stores and loaded up on groceries preparing for the inevitable rise in prices. After experiencing a 27% appreciation in earnings over the past few years and another 9% expected this year, the company's report should at least not disappoint.
- Family Dollar (NYSE:FDO): After dipping 7.5% following its last report, company earnings may enjoy a rejuvenation this quarter with the ending of the holiday sales season and an emphasis back on savings and locating great deals. Also, with the company trying and failing to break $60 over the last five months, a strong report could lead to a significant breakout to the upside.
- Red Hat (NYSE:RHT): With shares of the software company trading at near 52-week highs and carrying a PE multiple over 70, Red Hat will need a stellar report to churn higher Wednesday. Even if such a report is provided, shares may still fall victim to profit taking, which is shaping up to be long overdue.
- Best Buy Incorporated (NYSE:BBY): Over the past few years, perhaps no other company has reported more chaotic numbers come earnings season. At times, the company seems to be growing exponentially, while others mark the company as being near dead in the water. Beating eight times and missing six since 2009, the company will prove to be back in the vicious boom or bust cycle on Thursday. Either way, risk clearly outweighs reward.
Investing in any company before earnings contains significant risk and should only be considered by those willing and able to suffer sizable losses. If willing to take on this risk, consult multiple sources before making such a decision.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.