Friday, January 10, 2014

Earning season: Everyone have their brackets and draft picks in?

I got AAPL on the over. POT should miss on earnings in the second round. STX offensive has been solid all last year with products and share repurchase... I think they can take the division this year. Then again RKT has been working on their defense in the off season and improved their cost margins.

So earning season began yesterday with Alcoa (AA) reporting. At times I do feel like its a lot like fantasy football. Everyone has done their research in the moves and changes a company has done. We make our projections on what will happen. Then we wait and see when the "season" gets played out and the "score" comes in. I find some irony that my fantasy football friends who slap down $100 fees for a chance to win big money if their fantasy team wins are also the ones telling me the stock market is just a big casino and the little guy can't do it.

Fourth quarter earnings in my opinion is the most important one of the year. Not only do they give a quarter's worth of data but they also give a wrap up of the previous year and the first estimates of next year. With those estimates formulas and expectations change. I now that my Watch List on my portfolio tab has some major updates coming.

Additionally we have the most dividend raises of the year coming. Companies know what their last fiscal year brought in and what they can afford to pay for the next year.

As if that wasnt enough going on, we also have all of the annual meeting proxy voting coming out. As a shareholder of a company you are the owner and we have a responsibility to govern our company. There are initiatives to vote on to approve or disapprove. Now of course your dozen or 100 shares isn't gonna matter compared to Mr Wall Street and his 100,000. However then again it depends how you view voting in the national elections of your country. Your 1 vote vs tens or hundreds of millions of others.

I'm going to try to make a solid effort to review all my companies I have positions in and a few others I am interested in. I am embarrassed to admit that I am not as consistant with that as I would like. However that is a real strength of running a public blog. I have readers and an audience to help keep me going and motivated and thusly I can improve my own performance and habits. Its one of the reasons I stress a new investor should start a blog, or a message thread on a forum somewhere. It doesn't have to be entirely public, but at least to someone and enough people that you would feel compelled to not let down with slacking off.

Here is the estimated schedule for my companies. You'll see I have quite the task coming up but I do feel its important to stay on top of my companies research wise...

1-21: IBM
1-23: MCD
1-24: AAPL
1-29: RKT
1-30: POT
1-30: COP

2-3: AFL
2-3: PSEC
2-7: TCPC
2-10: HAS
2-10: OHI
2-10: KO
2-13: WHZ
2-13: O
2-15: CIG
2-18: MDT
2-20: WMT
2-28: ARCP

3-6: SPLS
3-6: KR
3-18: NDRO

Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.


  1. Hi Pully. I don't put much time into trying to predict quarterly earnings....especially given all the accounting games companies can play. I do however look for earnings trends. My best guess......profit margins will revert, therefore earnings growth will be at best flat. That doesn't take into account the global recession that can't be too many years off.
    Wow, I sound like a "doom sayer"....I need to work on that. All kidding aside, I'd love for POT to miss earnings badly (but maintain the dividend). They seems like a pocket of value on a pull back, given all the pessimism.

    1. Your comment on POT is a good one and I don't think enough investors have that.
      If you will never ever put money into the markets again: You want share price up.
      If you are accumulating more shares: You want them flat or down.
      Ideally I would love for all my positions to have a 0% cap gain and they keep raising dividends every year.

      You can really tell how new a person is to investing when they say "I just bought this yesterday and its down today. Whats wrong with the company should I sell? Thanks in advance for reply."

  2. I get the feeling that your pushing your luck if you believe that the market is going to keep going up from here. The market has been in bull mode for almost five years. Time to use some caution. What surprises me is how the earnings of companies in the standard and poors five hundred have been so good considering how slow the economy is growing.

    1. I find it odd that someone called "Penny Stock Investments" would be talking about pressing your luck with investing.
      Its not much of a surprise how earnings are going up. Cost cutting, share buybacks, technology efficiency.
      However I don't invest in the market. I invest in specifically researched companies.
      Lastly, its always time to use caution. Portfolio management and position sizing are key.

  3. Good analogy to the fantasy football :)

    1. As a sports fan I thought you in particular would like it.

  4. The funny thing about earnings though is that so much of the stock price change is determined by the analyst estimates. Is a $0.01 beat or miss really that big of a deal in the grand scheme of things? The good thing for value investors though is that the markets are generally more volatile so you can get better deals.