Filed Under:
Tickers in this Article: VFC, CMA, JNPR
Many earnings- and news-related events surface during this time of the quarter, highlighting how future prospects for a company are holding up and what the overall industry is experiencing. To make money on these news-related events, look closely at what the news is. For example, is the company announcing stronger or weaker earnings than expected? What are the prospects for growth? And how is the overall industry doing? These pieces of news provide an overall idea of good long and short areas to possibly get involved in. (For more read Trading On News Releases.)

Here are examples of what can be learned from three stocks recently in the news: VF Corp. (NYSE:VFC), Juniper Networks (Nasdaq:JNPR) and Comerica (NYSE:CMA).

VF Corp. Beats EPS Expectations
VF Corp. reported that its third-quarter earnings came in better than expected with earnings per share (EPS) of $2.10 compared with analysts' (polled by Thompson Reuters) $2.02 estimation. Revenue came in at $2.21 billion, missing the $2.24 billion estimate but still up 6% from last year. The apparel maker stated that it sees "a significant deepening of the global financial crisis and worsening economic conditions taking a heavy toll on consumer confidence and spending".

The company also raised its dividend by 1 cent to 59 cents a share. VF Corp. is expecting continued challenges in the months ahead with overall economic conditions taking a toll on its business as with so many apparel makers and retailers. VF Corp. shares closed trading October 17 at $55.55, down $2.95 on the day.

Juniper Networks Upgraded
UBS upgraded Juniper Networks from neutral to a buy, citing solid demand for IP routers. From a valuations standpoint, the company is looking cheap with a forward P/E of about 13 and $2.3 billion in cash with no debt. With some earnings momentum and a great balance sheet, shares could do well in this uncertain economic environment. Juniper's shares closed the week at $17.99, up 1.21 cents on the day. (Read about how to interpret analysts' ratings in Target Prices Vs Ratings.)

Comerica Profits Fall
Comerica profits fell due to increasing loan losses and a loss of interest income. EPS came in at 19 cents compared with analyst estimates of 6 cents. Loan write-off provisions rose to $174 million in Q3 compared with $45 million in Q3 2007. This means that loan loss write-offs continue to show up on financial statements, and we could continue to see the banking sector struggle as it works to get these bad loans off its books. Over the long term the write-offs should stop growing and, I hope, eventually end. When that happens, the banks' balance sheets will have been cleaned up, creating some compelling valuations. Comerica shares closed trading October 17 up 10 cents on the day at $29.32.

Bottom Line

News-related events can have both positive and negative impacts on the prices of stocks. By watching how a company performs compared with Wall Street estimates and checking management's comments about the future, you will have a good idea of potential long and short positions for making money in these volatile markets.

comments powered by Disqus
Related Analysis
  1. Retail Industry Stock Outlook - March 2014 - Industry Outlook


  3. Price Consolidations Breaking to Upside

  4. Sectors and Stocks to Watch This Week

  5. Bullish And Bearish MACD Crossovers

Trading Center