eSignal - Smarter Trading Tools

Earnings Trades to Consider this Week

May 7th, 2015

By John Scherr, WhisperNumber.com

Many of you may not be familiar with WhisperNumber or what we do as we have only recently partnered with eSignal. So a quick background overview may be in order. Since 1998, WhisperNumber.com has been tracking and publishing crowd-sourced estimates for earnings. These earnings expectations are called whisper numbers. Our whisper numbers are gained from individual investors and traders just like you that have registered with our site.

We’ve created a special subset of our database called Whisper Reactors. These companies are based on analysis of our proprietary whisper number database over the past fifteen years. These Reactors have a high probability of positive price movement following an earnings report when they beat the whisper number, and negative price movement when they miss the whisper number.

You can visit our website to learn more, but let’s review some recent alerts and get into a few of the earnings alerts you can find in our premium eSignal app this week.

Leggett & Platt (LEG)

We issued a long position alert for 30-day whisper reactor Leggett & Platt (LEG) on Friday of last week (May 1st) as the company reported earnings that topped the whisper number. Our data indicated a target price move of +9.6% in 30-trading days. Leggett & Platt opened trading on May 1st at 42.53 and quickly moved to a 45.75 level and higher. This was a +7.6% price move, and while not ahead of our target price move, we believed that waiting the full 30-trading days for the target exit date and an additional 2% would not be worth the risk. We issued an early exit alert to our clients and looked for a gain of 7.5% or better.

Sprint (S)

We issued a short position alert for 25-day whisper reactor Sprint (S) on Tuesday of this week (May 5th) as the company reported earnings that fell short of the whisper number. Our data indicates a target price move of -8.6% in 25-trading days. Sprint opened trading on May 5th at 5.15 and is now trading at a 4.82 level and lower. This is a -6.4% price move, and we’ll be keeping a close eye on the stock looking for it to match the price move expectation prior to our exit timeframe.

Macy’s (M)

Macy’s (M) is expected to report earnings on Wednesday, May 13th, before market open. The whisper number is $0.62, in-line with the analysts’ estimate and showing neutral confidence from the WhisperNumber community. Whispers range from a low of $0.60 to a high of $0.64. Macy’s has a 78% positive surprise history (having topped the whisper in 14 of the 18 earnings reports for which we have data).

The company has reported earnings ahead of the whisper number in three of the past four quarters with a whisper number. In the comparable quarter last year the company reported earnings six cents ahead of the whisper number. Following that report the stock realized a minimal loss in five trading days. Last quarter the company reported earnings nineteen cents ahead of the whisper number. Following that report the stock realized a 3.3% loss in one trading day, before turning and seeing a 1.9% gain in thirty trading days.

Macy’s qualifies as a whisper reactor with a 90% earnings reaction accuracy (beat the whisper number and see strength, miss and see weakness). If the company reports earnings that top the whisper number, the strongest average price movement of +5.1% comes within thirty trading days. If the company reports earnings that miss the whisper number, the strongest average price movement of -3.5% comes within thirty trading days.

We’ll issue an alert for Macy’s on Wednesday morning (May 13th) with appropriate price movement and timeframe information.

Priceline (PCLN), Higher Risk Momentum Reactor

So far we’ve highlighted our ‘classic’ reactors, but there is another type called ‘momentum’ reactors. The momentum reactors are more influenced by current major market movement/volatility as they are based on analysis of just the past five earnings quarters (classic reactors are based on the past four years of earnings.)

Momentum reactor Priceline (PCLN) is expected to report earnings on Thursday, May 7th, after market close. The whisper number is $7.82, ten cents ahead of the analysts’ estimate and showing strong confidence from the WhisperNumber community. Priceline has a 70% positive surprise history (having topped the whisper in 30 of the 43 earnings reports for which we have data).

The company has reported earnings ahead of the whisper number in all of the past four quarters with a whisper number. In the comparable quarter last year the company reported earnings seventy-seven cents ahead of the whisper number. Following that report the stock realized a 5.8% gain in five trading days. Last quarter the company reported earnings sixty-nine cents ahead of the whisper number. Following that report the stock realized a 6.9% loss in thirty trading days.

Priceline qualifies as a momentum reactor with an 80% earnings reaction accuracy (beat the whisper number and see strength, miss and see weakness). If the company reports earnings that top the whisper number, the strongest average price movement of +5.8 comes within thirty trading days. The company has not reported earnings short of the whisper number in the past five quarters.

We’ll issue an alert for Priceline on Friday morning (5/8) with appropriate price movement and timeframe information.

Additional alerts will also be issued this week for NVDA, BDX, and PDLI. Over the next two weeks we’ll issue alerts for M, JCP, JWN, A, URBN, ADI, PETM, LOW, SPLS, MRVL and more. The expected price reaction and timeframe data for these tickers can be found in our app on the eSignal platform. Trading on whispers is a technical play on market psychology, rather than a bet on a company’s fundamental strengths. No ‘secret formulas’, no hidden claims, no small print. Just time tested analysis of our proprietary database of whisper numbers to find only the best stocks in the best industries to profit from each earnings season.

Leveraging eSignal 12.1

WhisperNumber’s Whisper Reactors data can now be found on eSignal 12.1. By harnessing this software platform, users can access real-time whisper number data and alerts, which can be combined with eSignals large amount of both technical and fundamental analysis.

About the Author

Since founding WhisperNumber.com over 15 years ago, John Scherr has created the most powerful and comprehensive database of crowd-sourced earnings expectations available to the financial industry. He is a leading expert on whisper numbers and post earnings price reaction analysis, and he is widely featured in financial print and television media. John appears regularly on Fox Business television discussing the power of whisper number expectations. He created the business to help level the playing field for individual investors and traders. WhisperNumber’s proprietary data has been proven through numerous independent academic studies to provide greater returns when used as an investment vehicle, and as having a greater impact on stock movement than analysts consensus estimates