Bespoke Investment Group – Think BIG – Earnings Season Cometh
Believe it or not, earnings season begins again next Tuesday with Alcoa’s (AA) report after the close. Below is a look at the number of stocks reporting earnings by day this season through the start of August. As shown, things don’t really kick into gear until the back half of July, with the two biggest days coming on Thursday, July 24th and Thursday, July 31st. That being said, earnings will be front and center in terms of news flow for the remainder of the month after Alcoa’s report, so get ready.
For traders and investors looking for a comprehensive database that allows you to pull up any stock’s quarterly report and how it trades following earnings, our Bespoke Institutional offering includes access to the Bespoke Interactive Earnings Report Database. During earnings season, the database acts as a very useful tool to help decide how to trade stocks both heading into and immediately following their earnings releases.
Below is a summary of all of the 97,044 individual earnings reports in our database. As shown, since 2001, 61% of the 97,044 reports had earnings that were better than consensus estimates. This compares to 27% that missed estimates. In terms of revenues, 60% of reports beat estimates, while 38% missed.
Even more interesting is how the stocks have traded on the day of their earnings reports. For companies that report in the morning, we look at that day’s price change. For companies that report after the close, we look at the next day’s price change. As shown, the average one-day change for all quarterly reports in our database has been +0.13%. This means that on average, US stocks have had an upward bias in reaction to earnings going back to 2001.
In terms of volatility on earnings report days, the average US stock has seen a one-day change of +/-5.53%. This is the average absolute one-day change for all 97,044 quarterly reports from stocks in our database. Based on this, investors can expect any given stock to move up or down a little more than 5% on its report day every quarter.
If you would like to learn more about the Bespoke Interactive Earnings Report Database, please check out our Database page over at Bespoke Premium, or simply give us a call at 914-315-1248. To receive it now, sign up for the Bespoke Institutional membership at our Subscribe page.
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Bespoke Investment Group – Think BIG – Earnings Season Cometh
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