Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Jan 15, 2021 at 2:05 PM
Updated on Jan 15, 2021 at 2:31 PM
  • 5-Minute Market Rundown

Following record highs, the major indexes struggled to find footing this past week. Political turmoil remained in the spotlight, as well as increasing coronavirus cases and the potential for more substantial payments to most Americans in the form of stimulus checks. To start the week, the Dow Jones Industrial Average (DJI) closed the day with a nearly 90-point drop, as calls for U.S. President Donald Trump's impeachment weighed. Tuesday, stocks rose modestly, despite news of rising interest rates, and statements that market valuations may be too high. The major benchmark's were fairly muted by the next session, with another spike in COVID-19 cases likely dampening sentiment. After the close came the official news that the House of Representatives voted to impeach Trump for a second time. By Thursday morning, upbeat vaccine data and the hope of additional stimulus boosted the market, even as initial jobless claims surged to their highest level since August. This lifted the Nasdaq Composite (IXIC) to fresh highs, though all three indexes pulled back before the close. By the end of the week, stocks plummeted despite the unveiling of President-Elect Joe Biden's $1.9 trillion stimulus plan. To wrap up the week, all three major indexes are heading for losses.

Several Companies Show Political Side

Following last week's Capitol riot, several social media companies banned the president from their platforms. Analysts chimed in on Twitter (TWTR) this week, after the company removed over 70,000 accounts related to QAnon. Following in the footsteps of Twitter, and several others, Alphabet (GOOGL) removed new content uploaded to Trump's YouTube channel, noting it violated policies for inciting violence, while Amazon (AMZN) stumbled earlier in the week after the e-commerce giant stopped hosting Parler -- a social media operation popular with conservatives. However, it wasn't just social media and tech stocks that were impacted, as Deutsche Bank (DB) stock surged after the financial services institution said it would not conduct future business with President Trump or any of his companies. And Marriot stock (MAR) saw plenty of options volume after revealing its Political Action Committee will pause donations to U.S. lawmakers who voted against certifying President-elect Joe Biden's victory.

Plenty of Wheeling and Dealing, C-Suite Shakeups

Several companies saw notable organizational changes this week, as well. Synchrony Financial (SYF) was boosted after announcing several leadership transitions, and received two price-target hikes to boot. Meanwhile, underperforming American Tower (AMT) agreed to buy Spanish telecom company Telefonica's (TEF) European and Latin American mobile phone masts for $9.4 billion. The same day, Urban Outfitters (URBN) plummeted after a lackluster holiday season and a c-suite shakeup disappointed investors, and blue-chip Visa (V) abandoned its merger with financial technology company Plaid. Later in the week, Penn National Gaming (PENN) announced it will partner with Choice Hotels (CHH). 

 

Holiday-Shortened Week Features Inauguration

The upcoming week will be a shorter one as we observe Martin Luther King Jr. Day, but a slew of notable earnings reports, including various blue-chip names, are due out. Starting off slow, midweek will bring the inauguration of President-Elect Joe Biden, and the end of the week is filled with economic data. In the meantime, take a look at how much the Dow is worth in alternative assets

Published on Jan 15, 2021 at 10:53 AM
Updated on Jan 15, 2021 at 2:25 PM
  • Analyst Update
In just the first half hour of trading, more than 1,800 calls have already crossed the tape, which is five times the intraday average. Most popular is the January 2021 12-strike call, followed by the monthly February 13 call.
Published on Jan 15, 2021 at 12:29 PM
  • Midday Market Check

Stocks are extending this morning's losses, after disappointing U.S. retail sales data undermined news of President-elect Joe Biden's $1.9 trillion rescue plan. Specifically, retail sales dropped an unexpected 0.7% in December, despite economists projecting numbers would stay flat. At midday, the Dow Jones Industrial Average (DJI) is down roughly 140 points, guided lower by the likes of JPMorgan Chase (JPM) and Goldman Sachs (GS). Meanwhile, the S&P 500 Index (SPX) and Nasdaq Composite (IXIC) are also in the red. As it stands, all three indexes are headed for weekly losses. 

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

  • B. Riley eyes more upside for this red-hot retail stock
  • DropBox stock's rebound attempt sparks fresh analyst coverage. 
  • Plus, SRNE's rally picked up by option bulls; CRNT nabs post-conference bull note; and volatile DOGZ takes another dip. 

1-15 MMO stats

Sorrento Therpautics Inc (NASDAQ:SRNE) is seeing an unusual amount of options activity today. The stock was last seen up 10.7% at $8.85 in another attempt to break through recent pressure at its $9 mark, which has kept a lid on shares for the past couple months. Today's rally has option bulls taking notice, and so far 51,000 calls have crossed the tape -- triple the intraday amount. Most popular is the January 2021 8-strike call, followed by the 8.5-strike call in the same monthly series. The equity is still a ways away from its Aug. 10, six-year high of $19.39, though it has managed to tack on roughly 100% in the past 12 months, with solid support at its 200-day moving average capturing several pullback since November. 

SRNE 200-day

Wireless backhaul provider Ceragon Networks Ltd. (NASDAQ:CRNT) is the best performer on the Nasdaq today, up 54.3% at $4.86, after earlier hitting a nine-year high of $6.30. The bull gap came after an upbeat Needham Growth Conference and outlook drove the firm to hike its price target to $3.75 from $3.25. On the charts, CNRT was trading sideways for most of the past year, though three of its latest pullbacks bounced off the 160-day moving average. In the last nine months, CRNT has added 143%.

Meanwhile, China-based pet retailer Dogness Corp (NASDAQ:DOGZ) is near the bottom of the Nasdaq, down 22.6% to trade at $2.09, at last check. This negative price action comes amid news that the company entered into a securities purchase agreement for a direct placement of $7.4 million shares of common stock, priced at $2.15 per share. The equity has been especially volatile of late, surging to a three-month high of $3.30 the session prior. The security's 70-day moving average looks ready to capture this latest pullback, however, keeping the stock at a 12-month lead of 59%. 

Published on Jan 15, 2021 at 11:45 AM
  • Buzz Stocks

9 Cannabis Stocks Heating Up Headlines This Week

by Schaeffer's Digital Content Team

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.

After the Senate runoff elections tilted the favor of the Senate towards Democrats last week, there is growing anticipation that the prospects of cannabis legislation can now find some footing in Congress. While full-scale legalization may be out of reach, smaller reforms tied to police and banking could positively impact the cannabis industry. 

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. 11 through Jan. 15):

Aphria Inc. (NASDAQ:APHA), a leading global cannabis-lifestyle consumer packaged goods company, reported its quarterly earnings on January 14. Aphria reported net revenue production of $160.5 million CAD in the company's fiscal second quarter represented an increase of 33% year-over-year and an increase of 10% over last quarter's results.

President and CEO of Arena Pharmaceuticals Inc (NASDAQ:ARNA), Amit Munshi, reported sold 14,877 shares of ARNA stock on January 12. These shares were sold at an average price of $75.12 a share. The sale totaled $1.1 million.

Aurora Cannabis Inc. (NYSE:ACB), the Canadian company defining the future of cannabinoids worldwide, announced on January 14 that it had entered into an agreement with Great North Distributors Inc., Canada's first national sales broker for legalized adult-use cannabis.

Canopy Growth Corporation (NASDAQ:CGC) announced on January 14 that the company has filed an early warning report connected with the acquisition of an option to purchase 1 million (1,072,450) common shares of TerrAscend Corp.

GW Pharmaceuticals plc (NASDAQ:GWPH), the world leader in the science, development, and commercialization of cannabinoid prescription medicines, reported its preliminary, unaudited net product sales for the fourth quarter and full-year 2020, as well as the company's key priorities for 2021 on January 12. Based on preliminary unaudited financial information, GWPH expects total net product sales to be approximately $148 million for the fourth quarter. Roughly $526 million for the year of 2020.

The appointment of Rose Marie Gage to the Board of Directors at HEXO Corp. (NYSE:HEXO) was announced on January 14. Following the appointment of Ms. Gage, the Board will comprise of seven directors in total.

Organigram Holdings Inc. (NASDAQ:OGI), a leading licensed producer of Cannabis, announced its quarterly earnings results on January 12. The results were for the company's fiscal first quarter that ended on November 30. OGI's 2021 Canadian adult-use recreational gross and net revenue grew 42% and 30%, respectively, to $22.5 million and $16.8 million, year-over-year.

Sundial Growers Inc. (NASDAQ:SNDL) announced on January 11 that SNDL has launched high-quality Cannabis derivative products under the Top Leaf brand in response to rising consumer demands for solventless cannabis extracts.

HEXO Corp (NYSE: HEXO), announced a joint venture between Truss CBD USA and Molson Coors Beverages Co. (NYSE:TAP), is launching a new CBD beverage line in Colorado on January 13. The product, dubbed Veryvell, is a sparkling CBD water and non-alcoholic CBD beverage with zero sugar and calories. Colorado consumers will be able to choose from three different flavors: Mind & Body (Strawberry Hibiscus), Focus (Grapefruit Tarragon), and Unwind (Blueberry Lavender).

Published on Jan 15, 2021 at 10:32 AM
  • Buzz Stocks
 
Published on Jan 15, 2021 at 10:03 AM
Updated on Jan 15, 2021 at 10:18 AM
  • Buzz Stocks

Foot Locker, Inc. (NYSE:FL) just received a bull note from B. Riley this morning. The analyst upgraded the shoe retailer to "buy" from "neutral," and lifted its price target to $58 from $39. Despite this, the shares are down 0.4% at $47.12 at last check. 

Hitting its highest level since May of 2019 straight out of the gate, FL shares have pulled back below the $47.60 mark, where they have been consolidating for most of the week. The equity managed to push past its pre-pandemic levels earlier this month, with the help of its ascending 60-day moving average. In fact, in 2021 alone, Foot Locker stock is up over 17%. 

A closer look at analyst sentiment show most members of the brokerage bunch cautious on the stock. Of the 18 in coverage, 10 sported a "hold" or worse rating coming into today, while the 12-month consensus price target of $45.43 represents a 4% discount to last night's close. Should FL keep climbing, another round of bull notes could put some wind at the security's back. 

Meanwhile, short-sellers have been building their positions, with short interest up 11.2% during the last reporting period. The 7.03 million shares sold short make up 7.8% of FL's available float, or 3.6 days worth of pent-up buying power. Should some of these bearish bets begin to unwind, a short squeeze could help propel the equity higher as well. 

Published on Jan 15, 2021 at 9:51 AM
Updated on Jan 15, 2021 at 9:51 AM
  • Earnings Preview
  • Buzz Stocks

Brinker International, Inc. (NYSE:EAT) is a casual dining restaurant company that owns, operates, or franchises more than 1,600 restaurants in 29 countries under household names like Chili’s Grill & Bar or Maggiano’s Little Italy.

Despite the COVID-19 pandemic, Brinker stock has scored a 37.5% 12-month gain. EAT is another prime example of a V-shaped rally; the stock traded at $7 on March 18, and just yesterday scored a record high of $63.31. During this ascension, the shares' 60-day moving average has contained pullbacks along the way. 

EAT Stock Chart

Brinker will step into the earnings confessional before the market opens on Wednesday, Jan. 27. The company has beat expectations on all four of its most recent earnings reports. This resulted in huge post-earnings pops of 29.8% back in April, and 14.5% back in August. On average, in the last eight reports, EAT has scored a post-earnings move of 8.3%, regardless of direction.

Brinker International cut its dividend after the first quarter of 2020 as a result of the COVID-19pandemic. Prior to that, EAT had one of the fastest growing dividends out there. Brinker had more than quadrupled its annual dividend payments to stockholders since its initial $0.32 annual dividend in 2012.

Over the past year, Brinker saw its revenue growth halted by the pandemic, like many other restaurants. The company experienced a revenue decline of nearly $200 million and a net income decline of more than $130 million. Brinker stock currently has an extremely high price-earnings ratio of 123.62. However, that figure is expected to drop down considerably as its restaurant group begin generating more sales. EAT's forward-price earnings ratio is projected to be 29.15, which is still high but is much more reasonable than its current value. 

As far as options are concerned, EAT's Schaeffer's Volatility Index (SVI) of 64% sits in just the 10th annual percentile, revealing low volatility expectations are being priced into near-term contracts -- a boon to potential premium buyers. Plus, the stock has consistently rewarded premium buyers over the past year, per its Schaeffer's Volatility Scorecard (SVS) reading of 95 out of a possible 100. This shows the equity has tended to make larger-than-expected moves on the chart, compared to what the options market has priced in.

Published on Jan 15, 2021 at 9:37 AM
  • Buzz Stocks

A Quick Rundown of JJSF Ahead of Earnings

by Schaeffer's Digital Content Team

J & J Snack Foods Corp. (NASDAQ:JJSF) is an American manufacturer and distributor of branded snack foods and frozen beverages. Products include a slew of childhood favorites Icee, Luigi’s Italian Ice, The Funnel Cake Factory Funnel Cakes, and Tio Pepe’s Churros.

So far in 2021, JJSF stock has seen little movement. The shares have traded between $150 and $160 for the last month, and are a ways from their January 2020 annual highs of $189.16.  

The past 12 months were not great for J & J Snack Foods. The company’s stock came crashing down after a massive bullish run that lasted well over a decade. Although the COVID-19 pandemic contributed greatly, of course, JJSF’s bearish form began before the pandemic hit, and was seemingly triggered by the company’s poor earnings performance. With JJSF earnings due out after the close on Monday, Jan. 25 , it's prudent to dig into previous earnings reports and their results.

 J & J Snack Foods stock beat expectations on just one of its earnings reports released in 2020. This resulted in post-earnings drops of 10.7% last January, and a 3.1% fall in late July. Overall, after the last eight reports, JJSF averages a post-earnings move of 4.6%, regardless of direction. This time around, the options market is pricing in a 4.6% move for the upcoming report.

 J & J Snack Foods last paid a quarterly cash dividend to stockholders of $0.575 per share of its common stock. JJSF also has a forward dividend of $2.30 and a forward dividend yield of 1.52%. JJSF have paid dividends to stockholders since 2010.

From a fundamental point of view, J & J Snack Foods stock is simply not an ideal investment at this time. JJSF has had stagnant revenue growth and is incredibly inconsistent with its top and bottom line. In addition, the company's net profits seem to be in a general state of decline over the past few years. The company’s annual net income is $20 million lower than it was in 2018. To top it all off, JJSF stock has an exaggerated price-earnings ratio of 158.29.

Published on Jan 15, 2021 at 9:23 AM
  • Analyst Update
 
Published on Jan 15, 2021 at 9:18 AM
Updated on Jan 15, 2021 at 9:21 AM
  • Opening View
 
Published on Jan 14, 2021 at 4:37 PM
Updated on Jan 15, 2021 at 8:31 AM
  • Market Recap

Stocks spent most of the day trading solidly higher, before giving back most of their gains during the last hour of trading. The Dow finished just south of breakeven, while the S&P 500 and Nasdaq Composite also settled in the red -- the latter dampened by losses in the tech sector. Investors weighed today's disappointing jobless data against hopes that president-elect Joe Biden will roll out a bulkier stimulus package. The future president is expected to unveil a relief plan that will increase direct payments to Americans, extend unemployment insurance, and provide support for state and local governments. What also kept stocks afloat for most of the day was news that Johnson & Johnson's (JNJ) trial data for its one-dose Covid-19 vaccine showed a promising immune response. 

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

  • A deeper look at GameStop stock's surprising comeback.
  • The solar energy stock that could quadruple option bulls' money. 
  • Plus, Marathon stock's big bull note; Bandwidth stock set to bounce; and the bank stock scoring fresh highs.  

The Dow Jones Industrial Average (DJI - 30,991.52) lost 68.9 points, dropping 0.2% for the day. Intel (INTC) once again led the gainers with a 4% win, while Visa (V) settled to the bottom with a 3.6% drop.

Meanwhile, the S&P 500 Index (SPX - 3,795.5) closed down 14.3 points or 0.4%, and the Nasdaq Composite (IXIC - 13,112.64) dropped 16.3 points, or 0.1%.

Lastly, the Cboe Volatility Index (VIX - 23.25) tacked on roughly 1 point, or 4.7%.

Closing Indexes Summary Jan 14

NYSE and Nasdaq Stats Jan 14

  1. Pet retailer Petco Health and Wellness (WOOF) has just taken its shares public, following a hiatus. The stock opened at $26, which is 44% higher than its initial public offering (IPO) price. (CNBC)
  2. Yum Brands (YUM) -owned restaurant chain Taco Bell just announced a partnership with Beyond Meat (BYND), which will bring plant-based meats to its menu. (MarketWatch) 
  3. Why analysts are sprinting towards Marathon stock
  4. Bandwidth stock could be ready for its second wind. 
  5. This red-hot bank stock is reporting earnings fresh off a record high.

Corporate Earnings Jan 14

Unusual Options Activity Jan 14

Oil Prices Bounce Back to Pre-Pandemic Levels

Oil made a comeback today, closing at its highest level since February 2019, thanks to the continued Covid-19 vaccine rollout, as well as optimism surrounding Biden's stimulus package. February-dated crude added 66 cents, or almost 1.3%, to settle at $53.57 per barrel.

Meanwhile, gold gave back some of yesterday's gains, weakened by strengthening U.S. bond yields, a strong dollar and the possibility of further economic relief. February-dated gold lost $3.50, or 0.2%, to settle at $1,851.40 an ounce.

Published on Jan 15, 2021 at 7:17 AM
  • Buzz Stocks

Today's Stock Market News & Events: 1/15/2021

by Schaeffer's Digital Content Team

Stocks settled solidly in the red by the end of the trading session on Thursday. Investors weighed yesterday's disappointing jobless data against hopes that president-elect Joe Biden would roll out a bulkier stimulus package that may boost the economy. Positive news broke yesterday that Johnson & Johnson's (JNJ) trial data for its single-dose Covid-19 vaccine showed promise. 

The Dow Jones Industrial Average (DJI - 30,991.52) lost 68.9 points for the day on Thursday. The S&P 500 Index (SPX - 3,795.5) lost 14.3 points and the Nasdaq Composite (IXIC - 13,112.64) lost 16.3 points yesterday. The Cboe Volatility Index (VIX - 23.25) jumped 4.7% during yesterday's trading session.

Today is going to be completely jam packed for investors to close out the week. Retail sales, industrial production, and capacity utilization data is all due out. In addition, the Empire state and producer price indexes latest data are slated to be reported, as well as preliminary consumer sentiment index data and business inventories reports that are set to be released today.

The following companies are slated to release quarterly earnings reports today, January 15:

Citigroup, Inc. (NYSE:C -- $69.01) is a diversified financial service holding company. Citigroup will report its fourth-quarter of 2020 earnings before the bell today.

JPMorgan Chase & Co. (NYSE:JPM -- $141.17) operates as a financial services company worldwide. JPMorgan Chase will report its fourth-quarter of 2020 earnings before the bell today.

The PNC Financial Services Group, Inc. (NYSE:WFC -- $34.75) provides banking, investment, mortgage, and consumer and commercial finance products. PNC will report its fourth-quarter of 2020 earnings before the bell today.

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

BlackRock, Inc. (NYSE:BLK) is a publicly owned investment manager. Earnings per share increased 22.06% year over year to $10.18, which beat the estimate of $9.14. Revenue of $4,478,000,000 up by 12.60% from the same period last year, which beat the estimate of $4,300,000,000.

First Republic Bank, Inc. (NYSE:FRC) provides private banking, private business banking, real estate lending, and wealth management services. Earnings per share were up 15.11% year over year to $1.60, which beat the estimate of $1.52. Revenue of $1,080,000,000 up by 23.08% year over year, which beat the estimate of $1,020,000,000.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures and sells integrated circuits and semiconductors. Earnings per share rose 32.88% over the past year to $0.97, which beat the estimate of $0.94. Revenue of $12,676,000,000 rose by 21.95% year over year, which missed the estimate of $12,910,000,000.

Progress Software Corporation (NASDAQ:PRGS) develops business applications. Earnings per share increased 15.19% over the past year to $0.91, which beat the estimate of $0.77. Revenue of $129,063,000 rose by 4.58% from the same period last year, which beat the estimate of $128,010,000.

Looking ahead to next week, the third week of January will be relatively quiet on the economic-data front. Martin Luther King Jr. Day is on Monday, so the markets will be closed. Midweek, the National Association of Home Builders (NAHB) index will be overshadowed by President-elect Joe Biden's inauguration that will get all of the attention. Heading into Thursday and Friday, we'll see a slew of economic data released, including existing home sales. The earnings schedule next week, on the other hand, is loud and full of action as we dive right into earnings.

Please note that the U.S. stock market will be operating on a shortened schedule next week. The Nasdaq and New York Stock Exchange will both be closed on Monday, Jan. 18, in observance of Martin Luther King Jr. Day. A normal trading session will resume on Tuesday, Jan. 19, starting at 9:30 a.m. ET. 

All economic dates listed here are tentative and subject to change.


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