Monday, March 11: Earnings to Watch After the Market Close

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America’s economy appears to be on the mend, with a stronger-than-expected jobs report on Friday, March 8 propelling market indices to all-time or multi-year highs.

With respect to the Labor Department’s jobs report, 48,000 new jobs were created in construction, which will help support the recovering housing sector. Private sector job growth also increased at a rate significantly higher than the number of unemployed leaving the workforce.

I remain focused on identifying individual companies for investment that can make me the most money, whether the market continues to trend higher, lower, or move sideways.

Here are three company-specific stories I’ll be watching on Monday after the market close. Readers will benefit most by reviewing this information before earnings are released.

Casey’s General Stores (NASDAQ: CASY)
Monday, March 11 after market close; EPS $0.47 / Revenue $1.71B

Casey’s operates convenience stores in 12 Midwestern states, primarily Iowa, Missouri, and Illinois. The company’s 1,700 stores are primarily located in towns with less than 5,000 and 10,000 residents.

After reaching an all-time high of $63.00 during summer 2012, Casey’s sold off going into fall but shares have rebounded more than 8% year-to-date going into third quarter earnings.

On January 15, Casey’s stated in a regulatory filing that comparable sales for grocery and other merchandise increased 2.7% in December 2012, and prepared foods increased a massive 10.8%. A large portion of the YTD gains have occurred following the same-store sales announcement.

Despite the positive sales report, Casey’s is facing challenges in the cigarettes category. Northcoast Research downgraded the stock to Neutral from Buy late in 2012 specifically for this reason. In full disclosure, I was employed by Northcoast Research during calendar year 2011.

Management at Casey’s is also considering becoming a real estate investment trust in order to maximize shareholder value. Analysts believe the likelihood of a REIT transition is a strong possibility. For the current quarter, investors will be looking for confirmation that strength in grocery and prepared foods will continue to offset weakness in cigarettes.

Casey’s General Stores’ fiscal year ends on April 30, 2013.

Heckmann Corporation (NYSE: NES)
Monday, March 11 after market close; EPS $(0.02) / Revenue $108.0M

This $560 million environmental services company is a favorite among speculators in the oil and gas industry. Heckmann operates a service-based business, focusing on water solutions for shale oil and gas exploration. The company is headquartered in Coraopolis, PA, near my hometown of Hermitage, PA.

Heckmann has declined more than 11% year-to-date as investors experience continued weakness in the underlying price of oil and natural gas. Shares of HEK trade in a close relationship with the commodity prices for these fuels.

A handful of Wall Street firms have downgraded Heckmann so far this year, including Wedbush and Jefferies. Analysts at Wedbush cited weaker-than-expected channel checks lead them to believe Heckmann is losing its pricing power for environmental services. The Wall Street firm has a $2.50 price target on the stock and lowered their outlook for upcoming earnings.

On February 21, Jefferies downgraded Heckmann to Hold from Buy and lowered its price target to $4.50 from a previous $5.50.

The only sign of bullishness for the company in the last three months is that Mark D. Johnsrud, the CEO, acquired a near 38% stake in the company during December.

I would not advocate purchase of Heckmann for a trade ahead of the quarter. Shares will only move higher if we experience a rebound in the commodity prices of oil and natural gas.

Urban Outfitters (NASDAQ: URBN)
Monday, March 11 after market close; EPS $0.57 / Revenue $848.2M

Urban Outfitters labels itself as a “lifestyle specialty retail company” and operates under its namesake brand, in addition to owning Anthropologie, Free People, Terrain, and BHLDN.

In December, Urban Outfitters outlined expansion plans for the new calendar year including 49 stores across its family of brands. Same-store sales also increased in the high-single digits (9%) during the fourth quarter, indicating the company has strong traction going into 2013. Shares have risen approximately 5% year-to-date.

Wall Street has mixed sentiment on Urban Outfitter’s going into Monday’s earnings report after the close. Piper Jaffray and RBC Capital are two firms which have expressed bullish remarks in recent weeks. Piper raised their price target to $51 from a previous $41 based on strong holiday sales, and RBC Capital raised their target to $46.

In contrast, BMO Capital downgraded the stock to neutral within the last month citing lack of momentum at Anthropologie.

While I’m not certain if Urban Outfitters will trade higher or lower following Monday’s earnings report, I’m willing to bet shares will be higher by year-end as investors gain appreciation for new store openings and the company’s retail growth prospects.

Economic Data for Monday, March 11

On the economic front, Monday is a quiet day with no major news releases. The Treasury department is holding a 4-week bill announcement at 11:00 a.m., followed by 3-month and 6-month bill auctions at 11:30 a.m.

Thanks for reading, and consider subscribing to my posts for more Fool ideas on outperforming the market. Requests for future articles may be submitted to fool@johnmacris.com.


johnmacris has no position in any stocks mentioned. The Motley Fool owns shares of Heckmann and has the following options: Long Jan 2014 $4 Calls on Heckmann and Short Jan 2014 $3 Puts on Heckmann. 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!

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