Stacey Gilbert of Susquehanna Research and Eddy Elfenbein of Crossing Wall Street were recently featured on CNBC’s Trading Nation, during which they discussed four stocks that could be primed for big moves this week after the release of their latest quarterly results.
In this article we’ll take a look at their picks, which were Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Groupon Inc. (NASDAQ:GRPN), and C R Bard Inc (NYSE:BCR), and also share a pick of our own, which is Akamai Technologies, Inc. (NASDAQ:AKAM). In addition, we’ll see how hedge funds have traded these stocks recently.
Through extensive research that covered the portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details).
Can Amazon.com, Inc. (NASDAQ:AMZN) Deliver Another Positive Surprise?
Amazon.com, Inc. (NASDAQ:AMZN)‘s becoming an old hat when it comes to releasing positive earnings results, with the success of Amazon Web Services helping drive unexpectedly impressive bottom-line results in recent quarters. Can the success continue, or will Amazon finally run up against heightened expectations?
Gilbert stated that options activity suggests a 7% move in Amazon’s stock following its earnings, which would be slightly below the stock’s 8.8% post-earnings average movement from the last eight quarters, but higher than the 6% average movement over the past four quarters. Those moves have typically been positive ones, with five of its past six earnings reports generating a positive move for the stock during the next trading session.
There are conflicting opinions as to whether or not Amazon can do it again. M Science recently slashed its estimates for the company’s third quarter results and believes that they will miss Wall Street’s estimates, citing a deceleration in average order value and customer growth. On the other hand, analysts at Pacific Crest and Credit Suisse have each issued bullish commentary in recent days and hiked their price targets on the stock. Billionaire Ken Fisher’s Fisher Asset Management largely maintained its huge stake in Amazon during the third quarter, trimming it by 1% to 1.98 million shares.
Apple Inc. (NASDAQ:AAPL) Bulls Expect Momentum To Continue
Apple Inc. (NASDAQ:AAPL) has not been nearly as fortuitous as Amazon in recent quarters, as its shares have suffered a post-earnings decline in four of the past five quarters. However, Apple’s momentum appears to be shifting thanks to Samsung’s Note 7 woes (and the ultimate discontinuation of the device), which is anticipated to help the iPhone sell millions of units more than originally expected this year.
While Apple did already release earnings guidance last month, Gilbert believes the stock could nonetheless have a noteworthy movement in store, with a 4% implied movement, while its recent average movement after earnings has been about 6%. Cowen analyst Timothy Arcuri believes that Apple will beat estimates this quarter, in addition to guiding at least in-line with estimates. However, recent reports out of China suggest that Apple continues to lose ground in that important market, with UBS claiming that the iPhone 7 has been performing worse than the iPhone 6 did there, as domestic brands take more market share away from Apple.
Of the five funds in our database which have declared long positions in Apple as of the September 30 13F reporting period, four of them lowered their stake in the company during the third quarter, though two were only marginal decreases. For more on Apple, check out the 7 Best Music Making Apps for iOS.
We’ll check out three more stocks that could be huge movers this week on the next page.