Monday, August 22, 2011

Bespoke: The Worst and Best Stock Price Reactions to Earnings this Quarter

Bespoke Invest blog reports this earnings season was the worst in terms of stock reaction, since at least 2000.

The average one-day change in response to earnings for the 2,150 companies that reported was a pathetic -1.92%.  The second worst earnings season came in Q3 2008 when the average stock declined 0.70%, so this season was more than two and a half times as bad as the previous worst earnings season.  Sixty-percent of companies that reported went down in response to their reports, and nearly 30% went down more than 5%!  That's an astonishing number.  Eighty-three companies that reported lost 20%, or a fifth of their value, on the day of their earnings reports. 

Now of course much of that is because we do not live in a vacuum and the market has had a rough period during the heart of earnings season.  But it does provide opportunity.  Usually when a stock reports a great quarter, it gaps up and is off to the races in the ensuing months.  But a wicked market can bring those names back to earth, offering a chance for those who hate to chase stocks a more reasonable entry point.  Here are 33 stocks that went up at least 18% on their earnings day:

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Of course for those who have much more patience and like 'value' there is also the lovable losers list - here are 31 companies who lost at least 30% of their value post earnings report.  With at least some of these, once they create a longer term base there could be opportunity as well.

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