Should You Buy These Stocks Ahead Of Earnings Reports?
Buying a stock during the earnings season can be very unpredictable. How can we know if a stock will rise on its earnings results? For experienced investors, checking on the shares’ performance going into the event could provide a valuable clue. But these days, we have so many traders in the market going for short-term trades. Many of them focus purely on momentum, with no regard for things like earnings reports. That could change the way we assess the market.
Say, for example, conventional wisdom would suggest that we avoid companies that are in the midst of bankruptcy. But here people are trading Hertz (HTZ Stock Report) and JC Penney Company (JCPNQ Stock Report) like they are definitely going to the moon. In addition, airline and cruise-line stocks were also the best stocks to buy last month. Although only a fraction of people are flying and no one knows when cruise lines will sail again, traders were very optimistic and kept snapping up shares last month. Now with the resurgence of cases, the hope of these shares going back to pre-pandemic levels just got shattered.
How Should We Trade Stocks During The Earnings Season?
Heading into earnings season, an investor will ideally be in a best position if the stocks were bought before the previous breakout. That way, there is still time to act even if the stock plunges on its earnings report. Of course, the safest way to go is to wait until the announcement before making any investments. With that, investors face no downside risk, and will hopefully be able to catch shares on the way up. But what if we don’t want that? The truth is, there is no “perfect” methodology. Ultimately, the best performing companies will have some volatility during the earnings season, but in the long run it would most probably still be on the upwards trend. With that being said, let’s take a closer look at a list of companies that are reporting earnings this week.
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Will Nike Stock Surprise Investors Again This Week?
The major stock to watch this week ahead of earnings is Nike (NKE Stock Report). Shares of NKE traded 3.89% higher on Monday in anticipation of fiscal earnings on June 25th. Shares of Nike have rebounded and are nearly flat year to date. Although there has been slower sales due to store closures, the company’s shift toward digital offerings unlocks a lot more future opportunities for the leading apparel company. The US Department of Commerce reported that May retail sales surged higher than expected, and the clothing and accessories segment increased by 188% from April. This suggests that there could be pent-up demand.
What Are Analysts Saying About NKE Stock?
Many analysts have given ‘buy’ ratings. The only difference is the price target they each have for the stock. While near-term results are likely to show significant declines as a result of Covid-19, Nike’s solid e-commerce business will serve as a mitigating factor to some extent. That said, investors can be confident that an investment in Nike will return value in the long run with some volatility ahead.
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Is Accenture Stock A Buy?
Looking for a stock that has been consistently beating earnings estimates? Look no further than Accenture (ACN Stock Report). Shares of ACN are up by a considerable 40% over the past three months. The Fortune Global 500 company employs industry specialists who provide research, consulting services, and technology solutions to their relevant sectors. In other words, they provide what the clients need to prosper.
The company develops customer loyalty by anticipating needs and offering expertise in maximizing profit for clients. Despite the growing business and clients being loyal, the most obvious risk the company faces would be the gloomy economic conditions we are in right now. In such an economic environment, we tend to see a decrease in corporate spending, which could potentially affect Accenture’s revenue. On the bright side, the company just announced that it would add 1,400 jobs in St. Louis County. That signals strong demand for the company’s services in this trying time. That said, could we see another breakout for ACN stock this week?
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Can Rite Aid Make A Comeback?
While everyone has been hoping for a safe and effective vaccine, let’s not discount the importance of a drugstore chain like Rite Aid (RAD Stock Report). The company will report first-quarter fiscal 2021 on June 25 before the opening bell. Shares of RAD have been moving sideways and hovering around $13.
The drugstore company has been gaining ground from its efforts to provide home delivery services amid the Covid-19 crisis at zero costs to those with an eligible prescription. The latest move is to enhance customer experience and hopefully could be a catalyst for the company’s sales. These moves hopefully will be able to translate into better top-line profit in the first quarter. That said, can we expect RAD stocks to march higher in the long run regardless of the market’s reaction this week?