“This coming season is going to bring good news and bad news,” wrote Dr. DiLiddo in his Views essay on Friday. He went on to say, if you’ve been following our weekly Earnings Updates, you already know that there’s going to be more bad news than good news.
From the information we receive, analysts have been lowering earnings estimates on many more companies than they are raising earnings estimates. However, the companies in the S&P500 Index appear to be weathering the storm better than other companies. You may see this by comparing a graph of the average EPS of the VectorVest Composite to that of the S&P500.
How does this compare with earnings in our Canadian market? We can see from the graphs below that the TSX Composite is similar to the S&P 500. Earnings have been rising and soon should cross above its 50-MA. The overall market however, represented by the VectorVest Composite (VVC/CA), shows EPS is in a stronger uptrend having already crossed above the 50-MA.
So while earnings in both CA and US are still in a weak position, Dr. DiLiddo wrote, “Do not despair, the really good news is that the drop in oil prices may have seen its worst days and the strong U.S. dollar, which caused so much pain around the world, has been weakening. Both of these factors will play an important role in restoring earnings growth in the months ahead. The best news of all is that Head of the Fed, Ms. Janet Yellen, is not likely to raise interest rates very soon.
“While this is encouraging, the damage has been done and we still have to face a difficult earnings season. I would suggest that you know when each of your companies reports earnings and take defensive action, such as selling Covered Calls or buying Puts, if you have reason to believe it might miss its earnings forecast. Be prepared, Earnings Season Is About To Begin.”
A Resource to Know When Companies Report Earnings. One of the best Earnings Calendars I’ve been able to find for both CA and US stocks is the TMX Website.
Bell weather stocks reporting next week in the US and CA include:
| Earnings Calendar – US | Earnings Calendar – CA | |||||
| Company | Symbol | Expected | Company | Symbol | Expected | |
| Alcoa | AA | 4/11/2016 | Pulse Seismic | PSD | 4/11/2016 | |
| Adtran | ADTN | 4/12/2016 | Peformance Sports | PSG | 4/11/2016 | |
| CSX | CSX | 4/12/2016 | Platinum Group Metals | PTM | 4/11/2016 | |
| Fastenal | FAST | 4/12/2016 | Continental Precious | CZQ | 4/12/2016 | |
| Commerce Bancshares | CBSH | 4/13/2016 | IntelliPharmaCeutics | I | 4/12/2016 | |
| JP Morgan Chase | JPM | 4/13/2016 | Cogeco Com | CGO | 4/13/2016 | |
| Pier 1 Imports | PIR | 4/13/2016 | Dominion Diamond | DDC | 4/13/2016 | |
| Bank of America | BAC | 4/14/2016 | Corus Entertainment | CJR.B | 4/14/2016 | |
| BlackRock | BLK | 4/14/2016 | Caldwell Partners | CWL | 4/14/2016 | |
| Delta Air Lines | DAL | 4/14/2016 | Shaw Comm | SJR.B | 4/14/2016 | |
| First Republic Bank | FRC | 4/14/2016 | Sterling Resources | SLG | 4/15/2016 | |
| PNC Financial Services | PNC | 4/14/2016 | ||||
| Wells Fargo | WFC | 4/14/2016 | ||||
| Charles Schwab | SCHW | 4/14/2016 | ||||
| First Horizon National | FHN | 4/15/2016 |
Check EPS in VectorVest Graphs. If you own a stock or you’re considering a stock to buy, VectorVest recommends you check EPS on a one-year graph. You would like to see EPS rising all the way to the right edge. EPS is a 12-month leading indicator of earnings. Below, Performance Sports Group shows analysts expect earnings to continue to fall. PSG missed consensus expectations last quarter.
Presented by Stan Heller, Consultant, VectorVest Canada
DISCLAIMER: The information contained in this Blog is for education and information purposes only. Example trades must not be considered as recommendations. You should always do your own analysis and invest based on your own risk tolerance, investment style, goals and time horizon. There are risks involved in investing and only you know your financial situation, risk tolerance, financial goals and time horizon.
Thank you for another great new method for recognizing a significant trend change, this time with earnings estimates for the stock indexes or the overall market. I also appreciated the reference to the TMX site for a list of companies that will be reporting earnings.
Stan, thank you for always going the extra mile to provide all of us VV users with top quality information on how to improve our investing results.
Sincerely,
Irwin B.
Thanks for your kind comments Irwin. It appears this earnings season is quite possibly going to be one of the most challenging we’ve had for awhile. I’m counting on our VectorVest Community in the Blog and our webinars to keep me and all our members up-to-date with all the best information for how to protect and profit in this environment. Thanks again.