The Walt Disney Company (DIS), Alcatel Lucent SA (ALU) and Coinstar, Inc. (CSTR) Could Pull Back After Earnings this Week

Closing of Plant Could be a Good Indication of Poor Performance

Coinstar, Inc. (NASDAQ:CSTR) has seen a 7.5% decline over the last five sessions as the market braces for a weak earnings report. For the last year it has been no secret that its DVD business is declining but there is now a belief that the decline is more rapid than expected. Last week the company announced that it was shutting down a North Carolina assembly plant, which leads me to think that demand in the DVD rentals must be declining. The company might try to spin this news as a re-focus on streaming, but the news itself could cause temporary weakness when earnings are announced on Thursday

Conclusion

The reaction following earnings is for the most part a psychological response, and is sometimes not accurate with the progress of a company. Just last week Facebook Inc (NASDAQ:FB) traded lower after blowing past expectations, as did Seagate Technology PLC (NASDAQ:STX). Therefore, a stock trading lower after earnings doesn’t necessarily mean that it was due to a bad quarter, but rather the market responded badly. With that being said, each are good companies, and if a pullback does occur, investors should use it as an opportunity to invest.

The article Three Stocks that Could Pull Back After Earnings this Week originally appeared on Fool.com and is written by Brian Nichols.

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