Earnings Round-up: It’
The first-quarter earnings season is upon us again and, depending on the results, it could help to drive trading over the next several months. Traders are looking for direction and reasons to invest, but the overseas risk in European debt and higher interest rates in China are not making it simple.
As was the case in the fourth quarter, there are some high hopes of seeing Revenue Growth in addition to earnings acceleration as the economy recovers. Whether they are penny stocks, micro-cap stocks, or blue-chip stocks, you want to see growth.
The fourth quarter, in my view, showed promise. What was disappointing was the lack of strong revenue growth in the fourth quarter, an indication that spending is still sluggish.
I reckon that the key in the first quarter and beyond will continue to be the ability of companies to report higher revenues, which is what you want to see during an economic recovery, as it indicates increased spending.
The reality is that earnings can be made to look better via cost cuts and control. In addition, you must watch for guidance going forward, as this will also be a key factor.
Two key sectors will be Technology and banking. Traders are looking for leadership from these groups.
The NASDAQ has been struggling in recent weeks, but I continue to believe that the technology area will be a critical area, since this sector has provided much of the leadership over the last several years.
The start did not look promising.
Texas Instruments Incorporated (NYSE/TXN) announced a shortfall in both its Q1 revenues and earnings, but it was largely due to the production halts in Japan resulting from the earthquakes. The upper end of the Q2 earnings per share (EPS) guidance was also small of estimates, yet we need to see what the impact of the situation in Japan is going forward.
We then saw an impressive blow-out quarter from Intel Corporation (NASDAQ/INTC), which was the huge winner after blowing away Street estimates on revenues and earnings. The strong results from Intel are critical, as they indicate strong chip demand.
Technology companies also delivering better than expected results were Yahoo! Inc. (NASDAQ/YHOO) and International Business Machines Corporation (NYSE/IBM).
The area to watch for in technology will be mobility applications for tablets and smart phones, as users shift away from the more cumbersome PCs and laptops. Apple Inc. (NASDAQ/AAPL) is the best of breed in my view. Research In Motion Limited (NASDAQ/RIMM) has launched its PlayBook tablet, but, based on the reviews, the iPad 2 has nothing to worry about.
In banking, Wells Fargo & Company (NYSE/WFC) beat by a penny in its EPS, but fell small on revenues. On the plus side, The Goldman Sachs Group, Inc. (NYSE/GS) beat on adjusted EPS and revenues and State Street Corporation (NYSE/STT) also beat on revenues and EPS.
These are just some of the companies and areas to watch for during the First-Quarter Earnings Season.
As I have said, the key will be revenues, especially organic growth. We want to see revenues grow to drive earnings instead of cost cuts. Without revenues growing, it is hard to imagine a healthy economy and its my worry that this could hamper growth.
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Penny Stock Picks ‘
In the recent past there has been an upsurge in the number of people interested in dealing with these stocks. This is despite the smear campaign out there which is trying to stop people from dealing in these stocks; this is mainly due to their volatility. The best thing to do to avoid making huge losses is to be always on your toes as far as what is happening on the stock market is concerned. This may not be simple if you are plotting to have penny stocks as your part time job. To be able to function properly you will need to buy the services of reputable organization dealing in stocks, and particularly in these stocks.
Finding a excellent penny stock trader is not the simplest of tasks. Everyone in this stock business seems to be claiming to be the best in the industry. While some may be right to say they are the best, some are out there to make money out of you, or rather to steal from unsuspecting people who want to make money by buying and selling these stocks. Fantastic caution needs to be exercised in order to avoid falling into the traps of con men.
There are hundreds of newsletters to which you can subscribe that will update you on what shares you should trade in. The largest problem is, how do you choose the right newsletter to subscribe to? Well, the answer is that there is no known single newsletter that has always returned a hundred percent result on successfully predicting penny stocks. It all depends on luck; sometimes you land a excellent newsletter and sometimes you find one that sends your shares plummeting. A small advice that I find useful when looking for penny stock picks is to stick to brokers that dont boast about what they can do.
Most stock brokers that bombard you with all sorts of conflicting information are usually out there to try and sway potential traders to sell their shares and buy through them, and may not necessarily be telling you the truth as far as the most suitable shares to trade in are concerned. In most cases all they are interested in is the percentage they charge you for using them, rather than your success.
Another thing you should consider is not to trade in the very first penny stock picks you receive. Try to monitor their progress on the stock market for a certain period of time, and then you can ascertain whether what they claim is really right or if they are just out to get your money. A small prayer also comes in handy, as well as asking your friends dealing in these stocks to let you know which stocks picks turn out well for them.
That way you can try out your luck without worrying too much about the probability of falling into the traps of fraudsters.
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Always follow your instinct and remember that no matter how excellent your
Categories: Penny Stocks Tags: buy penny stocks, learn penny stocks, Penny Stocks
