In the stock market, there will always be insiders who seem to know more than you can ever hope to know.
While I can understand that sentiment, I’m here to make sure that you’re operating under the same intelligence that they are.
So, don’t keep losing money to the industry insiders, making their fat wallets even fatter!
You deserve a piece (especially more than them!) and I’m here to ensure you get it.
Reporting earnings is a critical time for any stock on Wall Street.
It’s also the time when industry insiders often stand to make the most amount of money, using their insider information to know if a company will beat or miss expected earnings.
Numerous reasons play into why a stock might go one way or the other, from scandals or new products or mergers, or whatever it may be.
A stock beating expected earnings can send it skyrocketing, filling the insiders’ pockets with cash who knew it was going to go up and got in while it was still low.
On the other side, insiders still make money when a stock misses expected earnings, often by short selling the stock since they can predict it will go down.
Now at the end of the day, this is all just predictions and what may happen—we don’t know anything definite until it has occurred.
In some cases, it can be nearly impossible to predict a stock’s movement after earnings.
One such example is Fossil (FOSL), which you may recall me discussing a few weeks ago.
Although it did not exhibit any of the usual tell-tale signs for beating earnings, FOSL managed to do just that.
While it’s not surprising for a stock to bounce up after beating earnings, FOSL did a whole lot more.
After exceeding expected earnings, FOSL shot up 80% overnight!
The profits, for anyone who was able to get in beforehand, were enormous.
As I said, there was no reason to expect FOSL to behave so incredibly.
Everything about its chart in the days preceding its earnings report were exceedingly normal.
To get in on gains like this, we have to look at a variety of factors and try our best to come up with a full picture and thereby predict how the stock will behave.
Sometimes this will just be straight up impossible.
However, knowing what to look for in stocks approaching earnings calls can still help you consider whether to buy in or short sell the stock.
How has the stock been behaving in the last week or so?
This is when insiders would be making their moves, so we watch closely to see where it moves.
Additionally, how has the stock been doing in terms of earnings in the past?
Does it typically beat or miss expected earnings?
What are the expected earnings for this quarter?
One good example to look at is Points International (PCOM).
PCOM provides e-commerce and tech services to loyalty program operators all over the globe.
PCOM has been in the news quite a bit in the last couple of weeks, perhaps as a way of drumming up interest before the earnings report which came out on March 8th.
In the days leading up to March 8th, we can see that PCOM was slipping down, and had been in a downtrend for a little while.
In terms of previous earnings reports, for 2017 third quarter earnings, PCOM missed expectations, and was slightly lower.
Beyond that, earnings have been steadily decreasing over the last year, both expected and actual.
Until now, when 2017 fourth quarter earnings were expected to be higher than ever.
The labyrinth of how expected earnings are calculated is something we need not concern ourselves with, but clearly, someone was expecting PCOM to do quite well, particularly in comparison to how it had been doing.
So, what do we do in this situation?
We watch the chart very closely. We stay apprised of all information coming out about PCOM.
And we then pass this information on to you, along with whether or not you should invest, either long or short selling.
It’s not always easy to predict how a stock will move, especially immediately before earnings have been reported.
Luckily for you, though, I’m here to give you all the information you need to ensure your biggest payday, and to make sure you stop playing into the hands of the insiders (all while you do nothing)!
I think they have more than enough money at this point, and it’s about time you started getting a piece of those profits.
