Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Jan 11, 2021 at 11:27 AM
  • Buzz Stocks

BlackRock, Inc. (NYSE:BLK -- $756.45) is a global investment management corporation and technology provider based in New York City. The company offers financial services for institutions, financial professionals, and individual investors. BlackRock has provided solutions for more than 30 years and is the world's largest asset manager. BlackRock operates globally with 70 offices in 30 countries and clients in over 100 countries.

BlackRock stock is set to report its fourth-quarter earnings before the bell on Thursday, Jan. 14. Looking back at BlackRock's earnings reports from 2020, BLK outperformed earnings expectations on all four reports released last year.

For the fourth quarter of 2019, BLK beat earnings expectations by a margin of $0.65. The company reported an earnings per share (EPS) of $8.34. For the first quarter of 2020, BLK reported a lower EPS of $6.60, but still beat analysts' earnings expectations by a decent margin of $0.24. BlackRock then reported an increase in earnings for the second quarter of 2020. The company reported an EPS of $7.85 and beat expectations by a wide margin of $0.86. Finally, in BlackRock's final earnings report of 2020, BLK reported earnings of $9.22 per share for the third quarter of 2020. The company also beat Wall Street's expectations by a large margin of $1.42. For its upcoming earnings report, BLK is expected to report an EPS of $8.70.

Regarding Blackrock stock performance, BLK has seen a slight gain of 5.6% since the start of this year. BLK stock price is up a notable 133% from its 52-week low of $323.98, and just this morning touched a fresh record peak of $765.46.

DailyBLK

BlackRock also has a forward dividend of $14.52 and a forward dividend yield of 1.92%. BlackRock's last dividend was paid out to BLK shareholders at $3.63 per share. The company has paid a dividend to shareholders since 2003. BlackRock has grown more than $3 billion in annual revenue over the past three years and its current revenue stands at $15.7 billion.

Options traders, meanwhile, are optimistic. This is per BLK's 50-day call/put volume ratio of 1.54 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 90% of readings from the past year, suggesting a much healthier-than-usual appetite for long calls of late. 

Overall, BlackRock stock is a safe bet for investors looking to outperform the major markets on a reasonably consistent basis. BlackRock stock doesn’t yield the highest dividend returns or offer extraordinary growth potential, but BLK does offer relatively low volatility and a faster growth rate when compared to most other financial institutions.

Published on Jan 11, 2021 at 10:41 AM
  • Buzz Stocks
 
Published on Jan 11, 2021 at 9:09 AM
  • Opening View
 
Published on Dec 3, 2020 at 2:46 PM
Updated on Jan 11, 2021 at 8:04 AM
  • Strategies and Concepts

As new traders flood the market, a return to the basics may help novices understand the fundamentals of options trading. To better assist them, we will be running posts diving into the finer details of options education. This week, we are looking at how money management can be applied to options trading. 

It's no secret that options trading involves a fair amount of risk, but in recognizing it, it becomes easier to manage. One way traders limit risk is by diversifying their trades. In other words, it's not a good idea to put all of your available capital into a single trade, or "all your eggs into one basket," so to speak. In general, avoiding vulnerability to a downturn in one area by combining a mix of stocks, bullish and bearish options, bonds, and cash will help form that protection.

With that comes a certain amount of discipline and patience, as it can be easy to want to follow the herd, or enter and exit positions using rash decision-making. However, it is better to stick to your own carefully considered and well-researched plan, which should have an exit strategy at the start. Overall, maintaining composure in regard to each trade is an important aspect of risk management. 

When creating your strategy, the size of the trade plays a crucial part, as it is the money-making aspect after all. After deciding how much you're willing to pay for the option, use limit orders instead of market orders to control your entry price. Overall, one strategy is to see how many trades you can have at the same time, give yourself a hefty cash cushion, and spread your remaining capital evenly throughout the positions. 

Lastly -- and one of the more advantageous uses of options trading  -- use partial closeouts to lock in profits or manage losses, particularly after a sharp move happens early on. Throughout it all, there will likely be losses, but they can be learning experiences that help you hone in on what approach works best for you. In an ever-evolving market, it's important to stay an active learner. 

Published on Jan 11, 2021 at 7:16 AM
  • Buzz Stocks

Today's Stock Market News & Events: 1/11/2021

by Schaeffer's Digital Content Team

The Dow finished the first trading Friday of 2021 at an all-time closing high, despite a disappointing jobs report being released for December. Investor sentiment remains boosted up by the possibility of additional stimulus ahead, following the Democratic victory in the Georgia runoff election mid-week. All three major indexes nabbed weekly wins last week. 

The Dow Jones Industrial Average (DJI - 31,097.97) added 56.8 points on Friday and posted a 1.6% gain for last week. The S&P 500 Index (SPX - 3,824.68) added 20.9 points for the day on Friday and posted a 1.8% weekly gain last week. The Nasdaq Composite (IXIC - 13,201.97) added 134.5 points on Friday and posted a weekly win of 1%. The Cboe Volatility Index (VIX - 21.56) lost 0.8 points on Friday and lost  5.2% overall last week.

With 2021 officially underway, the second week of the year is chock full of economic data for investors to unpack. The weeks starts off on a slow note, with no economic data, though Tuesday will feature the National Federation of Independent Business (NFIB) small-business index. Rounding out the week from Wednesday onward is the Consumer Price Index (CPI), jobs data, and the import price index. Friday closes out the week with plenty to digest, including the Empire state index, as well as preliminary consumer sentiment index data.

Today's trading session kicks the week off on a slow note, as there's no notable economic data due out.

The following companies are slated to release quarterly earnings reports today, January 11:

AZZ, Inc. (NYSE:AZZ -- $49.40) provides galvanizing and metal coating solutions, welding solutions, specialty electrical equipment, and highly engineered services. AZZ will report its third-quarter earnings before the bell today.

Commercial Metals Company (NYSE:CMC -- $22.56) manufactures, recycles, and fabricates steel and metal products, and related materials and services. Commercial Metals will report its first-quarter earnings before the bell today.

SYNNEX Corporation (NYSE:SNX -- $86.90) provides business process services. Synnex will report its fourth-quarter earnings of 2020 after the market closes today.

Here is a quick recap of how last week's earnings reports played out:

Acuity Brands, Inc. (NYSE:AYI -- $128.30) provides lighting and building management solutions and services. Earnings per share decreased 4.69% year over year to $2.03, which beat the estimate of $1.84. Revenue of $792,000,000 decreased by 5.12% from the same period last year, which beat the estimate of $788,070,000.

AngioDynamics, Inc. (NASDAQ:ANGO -- $16.19) designs, manufactures, and sells various medical, surgical, and diagnostic devices. Earnings per share were down 83.33% year over year to $0.01, which beat the estimate of ($0.02). Revenue of $72,770,000 rose by 3.95% year over year, which beat the estimate of $67,350,000.

Bed Bath & Beyond, Inc. (NASDAQ:BBBY -- $21.03) operates a chain of retail stores. Earnings per share rose 121.05% over the past year to $0.08, which missed the estimate of $0.19. Revenue of $2,618,000,000 decreased by 5.11% from the same period last year, which missed the estimate of $2,750,000,000.

Conagra Brands, Inc. (NYSE:CAG -- $35.73) operates as a consumer packaged goods food company. Earnings per share rose 28.57% year over year to $0.81, which beat the estimate of $0.73. Revenue of $2,995,200,000 rose by 6.18% from the same period last year, which beat the estimate of $2,990,000,000.

Helen of Troy, Ltd. (NASDAQ:HELE -- $228.51) designs, develops, imports, markets, and distributes a portfolio of consumer products. Earnings per share were up 20.51% year over year to $3.76, which beat the estimate of $3.02. Revenue of $637,737,000 up by 34.33% year over year, which beat the estimate of $551,850,000.

Lamb Weston Holdings, Inc. (NYSE:LW -- $76.63) produces, distributes, and markets value-added frozen potato products. Earnings per share fell 30.53% year over year to $0.66, which beat the estimate of $0.62. Revenue of $896,100,000 declined by 12.06% year over year, which beat the estimate of $876,790,000.

Lindsay Corporation (NYSE:LNN -- $137.70) provides water management and road infrastructure products and services. Earnings per share decreased 15.58% year over year to $0.65, which missed the estimate of $0.75. Revenue of $108,485,000 declined by 0.83% from the same period last year, which missed the estimate of $113,070,000.

Walgreens Boots Alliance, Inc. (NYSE:WBA -- $34.56) operates as a pharmacy-led health and beauty retail company. Earnings per share fell 10.95% year over year to $1.22, which beat the estimate of $1.03. Revenue of $36,307,000,000 rose by 5.73% from the same period last year, which beat the estimate of $34,950,000,000.

Micron, Inc. (NASDAQ:MU -- $77.11) designs, manufactures, and sells memory and storage products. Earnings per share rose 62.50% over the past year to $0.78, which beat the estimate of $0.71. Revenue of $5,773,000,000 rose by 12.23% from the same period last year, which beat the estimate of $5,730,000,000.

PriceSmart, Inc. (NASDAQ:PSMT -- $97.43) owns and operates U.S. style membership shopping warehouse clubs. Earnings per share increased 40.62% year over year to $0.90, which beat the estimate of $0.68. Revenue of $877,432,000 higher by 8.07% from the same period last year, which beat the estimate of $837,370,000.

WD-40 Company (NASDAQ:WDFC -- $265.25) develops and sells maintenance products, and homecare and cleaning products. Earnings per share were up 95.45% over the past year to $1.72, which beat the estimate of $1.03. Revenue of $124,559,000 rose by 26.38% year over year, which beat the estimate of $106,850,000.

Looking ahead to tomorrow, the NFIB small-business index is on deck for investors to unpack, as well as the latest job openings report. All economic dates listed here are tentative and subject to change.

Published on Jan 8, 2021 at 4:30 PM
Updated on Jan 10, 2021 at 3:36 PM
  • Market Recap

The Dow finished the first trading Friday of 2021 at an all-time closing high, adding over 56 points despite spending most of the session in the red thanks to a disappointing jobs report for December. Investor sentiment remains buoyed by the possibility of additional stimulus ahead, following the Democratic victory in the Georgia runoff election mid-week. Some of yesterday's stimulus optimism, however, has been dampened by Democratic Senator Joe Manchin's comments that he will "absolutely not" support a $2,000 stimulus check.

Meanwhile, the S&P 500 waffled at the breakeven for most of the day before eventually closing higher, while the Nasdaq Composite also finished the session with a sizable win. Both indexes managed to snag record closes while all three major indexes nabbed weekly wins. 

Continue reading for more on today's market, including:

  • How Pinterest stock helped Schaeffer's subscribers quadruple their money in 2020. 
  • A look at several cannabis stocks already making waves in 2021. 
  • Plus, one software stock's post-earnings highs; unpacking Boeing's settlement drama; and Target stock surges in 2021. 

The Dow Jones Industrial Average (DJI - 31,097.97) added 56.8 points, or 0.2% on Friday, with a 1.6% gain for the week. Sixteen of the Dow components finished higher, with Coca-Cola (KO) taking the lead with a 2.2% surge, while 3M (MMM), once again, fell to the bottom of the 14 losers, down 1.8% for the day. 

Meanwhile, the S&P 500 Index (SPX - 3,824.68) was up 20.9 points for the day, or 0.5%, with a weekly win of 1.8%, and the Nasdaq Composite (IXIC - 13,201.97) added 134.5 points, or 1%, with a weekly win of 1%.

Lastly, the Cboe Volatility Index (VIX - 21.56) lost 0.8 points, or 3.6% for the day, and 5.2% for the week. 

Closing Summary 0108

NYSE 0108

  1. A U.S. Justice Department official said that President Donald Trump will not be criminally charged for inciting Wednesday's attempted coup at the Capitol. (CNBC)
  2. Travel restrictions are tightening in Europe as Covid-19 cases continue to spread at an alarming rate. England will now require testing from all incoming travelers, while France has kept its restrictions on U.K. travelers steady for the foreseeable future. (MarketWatch) 
  3. This software stock just nabbed fresh highs after an upbeat earnings report. 
  4. Behind Boeing's billion-dollar settlement. 
  5. How Target stock entered 2021 on the right foot.  

Earnings 0108

UVOL 0108

Oil Clocks Solid Weekly Gains to Trade at Annual High

Oil hit its highest level in almost a year today, clocking a 7.7% one-week gain, bolstered by Saudi Arabia's decision to slash its production output, made earlier this week. For the day, February-dated crude added $1.41 cents, or 2.8%, to settle at $52.24 per barrel. 

Gold prices ended the week on a sour note, suffering their biggest one-day loss in nearly two months. The commodity has weakened in recent sessions due to rising U.S. government bond yields, and a strengthening dollar. February-dated gold shed $78.20, or 4.1% for the day, to settle at $1,835.40 an ounce, and fell over 4% for the week. 

Published on Jan 8, 2021 at 2:21 PM
Updated on Jan 8, 2021 at 2:27 PM
  • Editor's Pick
  • Bernie's Content

Part three of our postmortem mini series, is a look back on a resoundingly successful options trade on a red-hot social media stock that helped our subscribers more than quadruple their money. With our three top trades of 2020 coming from the tech, retail, and social media sectors, its clear that trading options offers a variety of ways to get the most out of your money.

2020 is well past the point of hyperbole. But optimism is contagious, and we would be remiss if we didn't remember the successes of the year as we head into 2021. So, we're going to look back at our most lucrative trade recommendation we gave in 2020. Below, we'll explain why we expected the big surge, and how the winning trade unfolded.

Back in the fall, subscribers to our Schaeffer's PowerTrend options recommendation service scored a 469.4% profit on our Pinterest Inc (NYSE:PINS) November 19 call. When we recommended the PINS call on June 30, the social media stock had just broke out above a trendline connecting lower highs since February. A short-term breather had occurred, but it was contained by a confluence of the short-term 40-day moving average and the longer-term 200-day moving average. Plus, the $21.84 area was double PINS' 2020 closing low.

Another price point we were watching was the company's initial public offering (IPO) price of $19, which could act as an additional cushion. And from a qualitative perspective, a visual discovery engine such as Pinterest seemed well-built for the stay-at-home orders of the pandemic. What else was there to do on your couch other than scroll your phone while you watch TV?

Pinterest stock didn't necessarily have a ringing endorsement from Wall Street, either. At that time, 16 of 26 brokerages in coverage maintained "hold" or worse ratings on PINS, so there was massive upgrade potential that could keep the wind at the stock's back. Meanwhile, short interest was near its IPO highs, and accounted for a healthy 20% of the equity's total available float. A capitulation of some of these weaker hands also stood out as a possible tailwind going forward.

COTW pins pre

Diving deeper, short-term options premiums on Pinterest stock looked relatively cheap, based on the equity's Schaeffer’s Volatility Index (SVI) that ranked in the low 28th percentile of its annual range. Lastly, the shares had shown a tendency to make big moves in the past year, too, as the equity's Schaeffer's Volatility Scorecard (SVS) came in at 87 (out of 100).

Tucked within the time constraints of the trade was Pinterest's July 30 earnings report, where Wall Street held expectations for a 15 cent loss seemed underbaked. Sure enough, PINS scored a post-earnings pop of 36.1% on July 31, which prompted an avalanche of price-target hikes. We closed the first half of our position the morning of Friday, July 31, when PINS was trading around $34. But PINS wasn't done. From August through October, the equity continued to carve out a channel of higher highs that culminated in another post-earnings pop of 26.9% on Oct. 29. That same Wednesday morning, Oct. 29, subscribers were able to close the final half of the position and lock in a 469.4% profit in just over four months.

Successful trades like these perfectly encapsulate the advantages of options trading. For a lower cost of entry, a trader was able to participate in PINS' breakneck rally in 2020. And if the trade had gone south as some inevitably do, there was limited downside risk. With that in mind, be sure to check out Schaeffer's Top Picks for 2021, a line-up of names that our research team has curated exclusively for our Schaeffer's subscribers.

cotw pins post

Subscribers to Bernie Schaeffer's Chart of the Week received this commentary on Sunday, January 3.

Published on Jan 8, 2021 at 12:23 PM
Updated on Jan 8, 2021 at 12:41 PM
  • Midday Market Check

Stocks are once again breaking records this afternoon, with all three major indexes eyeing weekly wins for the first trading week of 2021. Both the S&P 500 Index (SPX) and tech-heavy Nasdaq Composite (IXIC) scored fresh intraday highs for a second-straight session. Meanwhile, the Dow Jones Industrial Average (DJI) is losing traction at midday, down roughly 75 points. Investors have largely brushed off worse-than-expected jobs data, which showed the economy lost 140,000 jobs in December, as COVID-19 cases continue to rise across the U.S. 

Continue reading for more on today's market, including:

  • Anticipated upside sends Goodyear stock surging.
  • Boeing stock takes a hit after Justice Department settlement. 
  • Plus, bull note boosts DDD options activity; New Relic stock surges after naming new president; and mining stock drops despite strong YoY lead. 

MMC 0108

One stock seeing notable options activity today is 3D Systems Corporation (NYSE:DDD), last seen up 24.4%% to trade at $28.42, after the security earned a price-target hike from Craig-Hallum to $27 from $11, following the company's fourth-quarter preliminary review. So far today, 74,000 calls and 39,000 puts have already crossed the tape, which is 13 times the intraday average. Most popular is the monthly January 2021 25-stike call, followed by the 30-strike call in the same monthly series. The security just hit a five-year high of of $31.24 earlier today, staging a sharp bounce off its 30-day moving average. Plus, in the last six months, DDD has managed to tack on over 361%.

Another stock near the top of the New York Stock Exchange (NYSE) today is tech concern New Relic Inc (NYSE:NEWR), last seen up 18.1% at an 18-month high of $76.72. The significant bull gap came after the software company promoted Bill Staples to President and Chief Product Officer. The equity has has a volatile run of the charts of late, but today's pop helped shares break through long-time resistance at the $74 mark. In the last nine months, NEWR is up 49.7%.

Near the bottom of the NYSE today is Hecla Mining Company (NYSE:HL), last seen down 9% to trade at $6.21, as the strengthening dollar weighs heavily on the precious metal mining sector. Prior to today's drop, the stock had been consolidating just a hair below its Jan. 4, four-year high of $7.06. While the equity is trading back near its late-December levels, the ascending 20-day moving average looks poised to contain further losses. Longer term, HL still sports an impressive 104.2% year-over-year lead.

HL 20 Day

Published on Jan 8, 2021 at 11:32 AM
  • Buzz Stocks

Welcome back to our weekly series, Schaeffer's Cannabis Stock News Update, where we recap what happened in the world of marijuana stocks over the past week, and look ahead to how the cannabis industry will develop in the new year.

Investor interest in the cannabis industry is growing at an explosive growth rate, and the leading players continue to break through legal barrier after legal barrier, especially in the United States. More than 40 U.S. states legalized recreational and/or medical marijuana by the end of 2020. Now, more and more companies are starting to see the opportunity in cannabis cultivation, marketing, distribution, and technology.

As the cannabis sector continues to grow, investors can anticipate many more marijuana stock initial public offerings (IPOs) on the horizon for the cannabis industry.

Here is a quick roundup of major cannabis stock news this week (Jan. 4 through Jan. 8):

Cannabis accessory manufacturer Greenlane Holdings, Inc. (NASDAQ: GNLN), just announced its partnership with Last Prisoner Project (LPP) -- a nonprofit organization dedicated to clemency and reentry programs, advocating for individuals with cannabis convictions. Per the partnership, announced Jan. 6, Greenlane will make monetary contributions to Last Prisoner and participate in the organization's 'Roll It Up For Justice' program, which will prompt customers to donate to LPP when checking out online. 

Hexo Corp. (NYSE: HEXO) filed a report on Jan. 6. claiming that its top executives compensation grew by total almost 20% year-over-year to $14.4 million CAD ($11.1 million USD) in the fiscal year 2020, per a financial disclosure filed with the U.S. Securities and Exchange Commission (SEC). What's more, the company's CEO Sebastien St. Louis' compensation rose 26% to $11.2 million CAD in 2020, despite a "voluntary reduction" to Quebec's minimum wage for three pay periods in the second quarter, according to the filing.

The only real estate company focused on the U.S. cannabis industry, Innovative Industrial Properties, Inc. (NYSE: IIPR)announced on Jan. 8 that it signed a long-term lease with Holistic Industries Inc. for its Los Angeles, California property.

Sundial Growers Inc's (NASDAQ: SNDL) subsidiary special purpose vehicle which owns $51.9 million of the aggregate principal amount of senior secured debt, Zenabis Global Inc. announced on Jan. 6 that it had received a principal repayment of $7.0 million on the last day of 2020, per the terms of the Senior Loan.

Therapix Biosciences Ltd. (NASDAQ: TRPX), a clinical-stage pharmaceutical company focused on cannabinoid-based treatments, announced on Jan. 5 that it agreed to a non-binding letter of intent with Cyntar Ventures Inc., a company focused on development and commercialization of products and therapies in the psychoactive pharmaceutical space.

Aphria Inc. (NASDAQ: APHA), announced that its financial results for its fiscal second quarter, and for the six months ending on Nov. 30, would be slated for release on Thursday, Jan. 14 next week.

Organigram Holdings Inc (NASDAQ: OGI), a leading licensed producer of cannabis, announced. on Jan. 4 that the company will report earnings results for its first fiscal quarter of 2021 on Jan. 12.

Published on Jan 8, 2021 at 10:29 AM
  • Buzz Stocks
 
Published on Jan 8, 2021 at 10:26 AM
Updated on Jan 8, 2021 at 10:26 AM
  • Buzz Stocks
 
Published on Jan 8, 2021 at 10:23 AM
  • Analyst Update
 

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