Four Stocks to Monitor the Final Two Days of this Week
Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
If a stock is a reflection of a company’s fundamental progress, then earnings are the most important catalyst for a stock. A solid earnings report can set the trend of a stock for the following three months, as can a bad earnings report. In this article I am looking at four companies that announced earnings on Wednesday, in afterhours, that should be monitored for the remainder of this week.
After the market closed, Guess? Inc (NYSE: GES) announced what appears to be a very solid quarterly report. The stock moved higher in afterhours trading by nearly 5%, but not because of its top or bottom line; it was thanks to a special dividend in the amount of $1.20 (greater than its current yield).
Guess already pays a very generous yield, but this one-time payout is yet more evidence of the company’s friendliness to shareholders. In terms of performance, the stock has traded lower since it lowered guidance on Aug. 22, losing more than 22% of its value. Therefore, the stock is oversold. As a result, with a special dividend and earnings that were in-line with expectations, watch for Guess to see a possible reversal, perhaps with a trend higher in the final two days of this week.
Aeropostale (NYSE: ARO) traded considerably higher on Wednesday after competitors Express and American Eagle posted solid quarters combined with strong industry performance during the Black Friday holiday shopping season. However, the stock gave up all of its 6% gains after barely exceeding expectations for Q3 results.
The retail company posted a 2% gain year-over-year in sales, which beat expectations by $4 million and beat bottom line expectations by $0.02 with its earnings of $0.31 per share. In addition, the company guided considerably lower for its current quarter, citing an inconsistent sales environment. With that being said, the stock is already trading with a 26% loss during the last six months after guiding down in previous quarters. The company looks to be having a hard time with predicting sales trends, and therefore I would watch for further loss as the market has been unforgiving of such inconsistencies.
La-Z-Boy (NYSE: LZB) traded considerably lower (13%) in afterhours trading after missing on both top and bottom line expectations. The company saw mid-single digit top line growth for the quarter and a horrible bottom line miss of $0.08 per share (expecting $0.20). The company did, however, reinstate its quarterly dividend and saw double digit Furniture Gallery growth, though the market did not seem to care.
The stock has had a tremendous year with a 73.5% gain, but may be a little too expensive considering its single digit growth. La-Z-Boy had been a bright spot in the space, but investors have been harsh on furniture companies in the past following earnings (i.e. Tempur-Pedic). Therefore, I would watch for further losses in the last two days of the week, more than its current loss of 13% in afterhours trading.
By far the big winner in the afterhours trading was Infoblox (NYSE: BLOX), a stock that reached gains of nearly 20%. Not only did the company destroy top and bottom line expectations, it also raised the guidance for this upcoming quarter and full-year 2013.
In the last two months this stock has lost more than 40% of its value following significant profit taking and a secondary offering that was not warmly welcomed. However, now with such a strong quarter it is very likely that we see increased movement in the days ahead.
Regardless of what happens with these four stocks, you can rest assured that price movements will be volatile. Personally, I am expecting significant movement from each of these stocks, in both higher and lower directions. Therefore, unless you plan to play the trends, you might be better served by waiting before initiating a long or short position. Either way, each of these stock are worth monitoring for the remainder of this week as potentially large movers.
BrianNichols has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Guess?. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!