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The No. 9 Cloud: An Earnings Season Fantasy

The No. 9 Cloud: An Earnings Season Fantasy

The corporate confession season to report, declare and bare all is here to stay. Will Wall Street’s expectations continue to run higher? Or has the hype train already left the station … for good?

Stock and Roll Fantasy

Here come the jesters, one, two three … it’s all part of my earnings fantasy.

I love the music, and I love to see the crowd. Dancin’ in the aisles and tradin’ out loud…

If this isn’t your first issue of Great Stuff — welcome, if it is! — you know I’ve banged my head on the wall of sense and reason for months, wondering when (and if) Wall Street’s levee of over-exuberance would eventually break.

We’re not there … yet. But the earnings tide is rolling in now — and fast. Forget the dearth of weeks past. Forget the doldrums and thumb-twiddling of go-nowhere stimulus talks.

Hundreds upon hundreds of companies will rush to the earnings confessional this week, and the market’s becoming more sell-happy by the minute.

And Great Stuff? You know we saved you a front-row seat and some popcorn!

Quality earnings entertainment is here at last; the corporate confession season to report, declare and bare all is here to stay. Will Wall Street’s expectations continue to run higher? Or has the hype train already left the station … for good?

Let us know what you think at GreatStuffToday@BanyanHill.com! We’d love to feature your email in this week’s edition of Reader Feedback.

I hope you put on another pot of coffee for yourself now. There’s such a glut of earnings underway that we’re launching right into our Chart of the Week from the get-go, courtesy of Earnings Whispers on Twitter.

Psst, before you read further…

Next week, my colleague and friend Ian King will hold what he calls “the biggest event of his career” — the New Era Fortunes Summit. (Sound familiar? We gave you a special sneak peek on Friday!)

If you missed Great Stuff’s exclusive interview with Ian King last week, he teased a new strategy that can help you to identify small, innovative companies with the potential to gain 1,000% in as little as a year.

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Great Stuff Chart of the Week

Interesting corporate news? In my humdrum, bleak market news cycle?

It’s more likely than you think.

Where should we even begin with this week’s tsunami of earnings excitement? Take a look:

There’s such a glut of earnings underway; we’re launching right into our Chart of the Week from the get-go, courtesy of Earnings Whispers on Twitter.

Why not start with Great Stuff Pick iRobot Corp. (Nasdaq: IRBT)!

We got into the automatic-vacuum vendor last quarter after its beat-and-raise earnings report — a clean sweep, if you will.

Depending on when you got in on IRBT as it sold off on the good news, you sit on about a 25% gain. Congrats, by the way!

We weren’t the only ones snatching up the mop-bot maker after the profit-taking. And ‘tis the season for exactly this kind of overreaction sell-off scoop-up in otherwise healthy, growing companies. We’ll keep a lookout for more of these trades for Great Stuff Picks.

But in the meantime, we have iRobot hyping its guidance for this quarter. Soon we’ll all see if it can walk the robotic walk. (Low-key, I’m hoping for an update on the now-delayed robot lawn mowers if nothing else. Mr. Roboto can take a Kentucky summer for the team next time…)

Any other big names stand out to you? Anyone? Bueller?

It’s a veritable consortium of chip kingpins: Lam Research Corp. (Nasdaq: LRCX), Xilinx Inc. (Nasdaq: XLNX) and Intel Corp. (Nasdaq: INTC) will dish out their dealings, declarations and data.

Great Stuff is looking out for hints of any hiccups in production and demand … or, if you’re Intel, yet another delayed product rollout.

Now, Wednesday has the who’s who of American automakers — Winnebago Industries Inc. (NYSE: WGO)! Seriously, though, this might be one of the few quarters to go a-knocking and see if the Winnebago report is rocking.

With millions of Americans stuck home, how many do you think said, “screw it, we’re going mobile!” and headed down the RV-ing road? Trust me, it’s not just roaming retirees who want to pack a bag, leave town and get out of dodge right now…

Oh, and there’s Tesla Inc. (Nasdaq: TSLA) … so I guess we’ll cover Elon’s latest stop-and-go excitement later this week. But even on the alternative energy front, I’m more interested in hearing from NextEra Energy Inc. (NYSE: NEE) anyway — one of your few ways in on hydrogen energy that’s already at the power plant level.

Editor’s Note: Need more info on the alternative energy trend? Click here for a radical energy revolution coming soon to 50 million American homes (and you bet it’s not solar or wind).

I get it, Mr. Great Stuff. So there’s a few big names set to report. What’s the big deal? Why should I care?

By and large, the biggest excitement in Earnings-ville this week is the clearer and clearer view we get at the consumer condition.

Almost every aspect of the average American’s consuming health is under the microscope in one way or another this week. Sure, discretionary purchases like motorhomes and robo-sweepers may not be a good snapshot of a consumer climate.

But when you throw in all the shades of the Main Street spectrum, we get somewhere…

If you’re in the mood for industrials, Union Pacific Corp. (NYSE: UNP) and CSX Corp. (Nasdaq: CSX) have you covered on the freight front. Call it a gross generalization, but if people buy more, people make more, and people ship more. Rinse, repeat.

That’s why analysts have been all aflutter around logistics and shipping stocks, at least, with railroads seeing a few upgrades from the Street. Rail volumes themselves hide no secrets — least of all when it comes to consumer spending and industrial output.

Well, that’s the much more interesting way to look at stodgy ol’ railroad stocks. At least they aren’t as lackluster as banks…

Speaking of, we talked about both your local retail bank and the sector’s big boys last week — which, if you haven’t answered our poll about it, let us know how you really feel about bank stocks right here. We’ll dig into that in this Wednesday’s poll.

This week will show another side of the financial coin — oh, you bet it’s time to chat consumer credit!

Give it up for the people-facing finance folks: Discover Financial Services (NYSE: DFS), Capital One Financial Corp. (NYSE: COF) and American Express Co. (NYSE: AXP) report throughout the week. What we’re looking for here (for better or worse) is a sharp move either way in how much Americans spend … and how much they’re able to spend.

Oh, throw Equifax Inc. (NYSE: EFX) in there, just for the fun of it! So, with creditworthiness and spending out of the way … why not touch on consumer confidence too for good measure?

Besides the brick-and-mortar retail small fry, no other industry is as under the wire this earnings season than airlines. It’s do-or-die time to convince passengers to fly while also cutting costs at every step — such as asking employees to take pay cuts.

And a few more airline stocks will try to sneak their way through the earnings minefield this week as well: American Airlines Group Inc. (Nasdaq: AAL), Southwest Airlines Co. (NYSE: LUV) and Alaska Air Group Inc. (NYSE: ALK).

My eyes will be watching the skies … and whether or not any airline gets a leg-up on the competition in getting fliers back onboard. Whomever can lose the least cash in the meantime is king.

Great Stuff: The Golden Goose Is on the Loose

All right, now I could keep rambling about the rest of this week’s earnings long into the eve, as we veer between overjoyed and overwhelmed at the sheer amount of earnings. And we didn’t even mention Netflix Inc. (Nasdaq: NFLX) yet…

But right here, right now, we’ll call it a day and turn the conversation over to you.

Which earnings reports are you looking forward to most? Are there any companies you expect nothing but Greatness from? Or are you waiting to see a sector self-destruct under the weight of high hopes?

Whatever’s on your investing mind, let us know in the Great Stuff inbox!

GreatStuffToday@BanyanHill.com is the place, now’s the time. You might even see your email in this week’s edition of Reader Feedback! You can also keep up with us on Facebook, Instagram and Twitter.

Until next time, stay Great!

Joseph Hargett

Editor, Great Stuff

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