The calendar is heating up this week for tech stocks. We have several companies reporting earnings. One newer name that is coming out of its quiet period. Finally, there is one stock that is seeing its lockup expire so we will touch on that too.
Earnings This Week
Tonight after the close we have Barracuda Networks (CUDA) and Netflix (NFLX - Free Report) reporting numbers. We already have an article on NFLX (https://www.zacks.com/stock/news/256414/3-key-predictions-for-netflixs-q1-earnings) so be sure to check that out. CUDA has a very negative -20% Earnings ESP yet they have beaten the Zacks Consensus in each of the last four quarters. One year ago, CUDA posted an impressive 800% positive earnings surprise and the stock moved higher by more than 14% following the report. The next three stock price moves were 22.8%, 5.9% and 5.4%.
Tuesday after the close we have two big tech names in IBM (IBM) and Lam Research (LRCX - Free Report) . IBM has topped the Zacks Consensus Estimate in each of the last 6 quarters but the price reaction following the report has not been all that positive. Add to that the idea revenue will show a year over year decrease and a 0% Earnings ESP score and sitting this one out might be the best most. LRCX is a Zacks Rank #2 (Buy) that has also beaten the Zacks Consensus Estimate in each of the last 6 quarters and has seen its stock move less than 4% (up or down) following all of those reports. A good strategy for that play could be an options strangle.
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Wednesday has Qualcomm (QCOM) and eBay (EBAY). QCOM is currently a Zacks Rank #4 (Sell) while EBAY is a Zacks Rank #3 (Hold). Both have Earnings ESP of 0% so there isn’t too much to go on there. I see that EBAY missed the most recent quarter yet the stock advanced by 5.8% in the session following the announcement. EBAY tends to move following earnings so an options straddle might make some sense as the stock moved +12.9% two times and -13.2% once in the last six quarters. The smallest move was a 4.3% advance following the March 2016 quarter.
Thursday after the close will see numbers from NCR Corp (NCR - Free Report) and Maxim Integrated (MXIM). I have written about NCR being a beneficiary of new technology for ATM machines, but investors should really be cashing in on this stock. Right now, NCR is a Zacks Rank #2 (Buy) that has an “A” for the Growth and Value style score. Trading at 13x forward earnings is great, but add to that a solid history of beating the number and you have something worth taking a deeper look at. MXIM broke a terrible trend of year over year revenue decreases last quarter and estimates are calling for another helping of growth this quarter.
Quiet Period Ending
After a company holds an IPO the investment banks that took the stock public tend to wait 25 days before initiating coverage. Look for new coverage to come from Goldman, JP Morgan, Barclays, Citi, Pacific Crest, William Blair, JMP Securities, Raymond James and Cowen for Alteryx (AYX - Free Report) . The company priced 9M shares at $14 and they opened for trading at $17.25. That turned out to be very close to the high, which was reached later that day at $17.50.
AYX doesn’t have a Zacks Rank yet as the rank is based on earnings estimate revisions from the brokerages that cover the stock. Keep in mind that this is a pretty small company (roughly $150M in market cap) but it looks to have some big name coverage soon. That should get the story to some of the bigger institutions, but most of the bigger institutions have a requirement that investments only be made in stocks that are over $1B in market cap.
As part of the IPO process, the underwriters usually include a lockup clause to restrict insiders from selling their shares. Usually, this is 180 days following the IPO. The end of the lockup has come for Crispr Therapeutics and there are now 27,135,884 shares that can be sold. Thing is, I would not expect much more than 1% of that total to find its way to the market. The stock only trades about 65K shares per day, so even if an insider wanted to dispose of 7K shares, that would be 10% of a day’s trading and would likely impact the price.
Right now I see CRSP up 2% on volume of around 22K shares. So if you wanted to short this one into the lock up, you probably made the wrong move. CRSP has yet to get a Zacks Rank.