As of this writing on March 6, the Dow Jones Industrial Average continues to make record highs.
I am not a believer in timing the market as a long-term investor. However, over the last three weeks I have been selling my stocks and have hardly put any new money to work. I am universally in agreement with the market pessimists who believe that market strength is being driven by global economic easing, which is managing to temporarily mask the fundamental weakness.
Given the above disclosure, if you want to remain invested in the market, I recommend owning stocks on an individual basis. Here are three popular stocks that report earnings on Thursday, March 7 or Friday, March 8.
Foot Locker, Inc. (NYSE:FL)
Friday, March 8 before market open; EPS $0.72 / Revenue $1.68 billion
Readers likely recognize Foot Locker, Inc.(NYSE:FL) as the mall-based retailer of athletic shoes and apparel. As of February 2013, the company operated 3,335 stores in 23 countries across North America, Europe, Australia, and New Zealand.
The $5.3 billion Foot Locker, Inc.(NYSE:FL)s principal competitor is Finish Line Inc (NASDAQ:FINL), which is significantly smaller with a market capitalization of only $887 million.
On February 20, Foot Locker, Inc.(NYSE:FL) management announced their fiscal 2013 capital allocation plans, including a first quarter dividend of $0.20 (11% increase vs. 2012), a new $600 million share repurchase program, and capital expenditures of $220 million to capitalize on growth opportunities around the globe.
Wall Street is unanimously bullish on Foot Locker heading into the company’s fourth quarter results on Friday morning. Nearly all firms believe the company will outperform the broader market in 2013 and should be owned into Friday morning’s earnings release.
Pandora Media Inc (NYSE:P)
Thursday, March 7 after market close; EPS ($0.05) / Revenue $122.8 million
Pandora Media Inc (NYSE:P) is a $2 billion online-radio company which went public at $16 per share in June 2011. The company boasts over 125 million registered users for Internet radio, however ticker symbol P has struggled to gain profitability as a public company.
Shares fell to a 52-week low of $7.08 in November 2012 following a weak quarter and persistent rumors that Apple Inc. would launch its own streaming radio service.
The Wall Street Journal reported in December that Pandora continues to lose more money as listeners grow, simply based on mathematics. Advertisers are willing to pay less on mobile platforms such as Android and iPhone devices than traditional desktop and laptop mediums. Music royalties have consistently exceeded the cost that advertisers are able to pay.
Despite the negativity, Wall Street believes Pandora shares can go higher, although I am not a believer. Analysts at Wells Fargo set a valuation range for the stock between $15 and $17, while Canaccord Genuity recently set a $14 price target.
For the current quarter, analysts believe that Pandora could report strong revenue (listener metrics) but guidance could cause the stock to fall. I would advise readers to sell Pandora ahead of the quarter.