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Zacks Market Edge Highlights: Trex, Zoom Video, Home Depot, Asbury Automotive and Boise Cascade

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For Immediate Release

Chicago, IL – March 3, 2022 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/1876268/how-to-trade-earnings-surprises

How to Trade Earnings Surprises

Welcome to Episode #305 of the Zacks Market Edge Podcast.

  • (1:00) - The Secrets To Earnings Season Trading
  • (11:10) - Earnings Beat Selloff: Should You Be Buying The Earnings Beats?
  • (19:50) - Is The Guidance Key To Earnings?
  • (22:20) - Should You Be Buying Near All Time Highs?
  • (27:45) - The Risk and Rewards of Trading IPOs
  • (35:15) - Episode Roundup: TREX, ZM, BCC, MU, ABG, COIN, HD, YNDX
  •                Podcast@Zacks.com

 

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

This week, David Bartosiak, Zacks Stock Strategist and the editor of Zacks Surprise Trader portfolio, joins the podcast to talk about how to trade the earnings surprises.

No one knows better than Dave, that trading the earnings reports can be fraught with danger, but also can be quite lucrative. Dave has been buying stocks ahead of the earnings reports in the Surprise Trader portfolio for years.

But in 2022, it is more challenging than ever. Even a beat and a raise is no guarantee that a stock will see a big boost after an earnings report.

What should traders do to enhance their chances while trading the earnings surprises?

Strategies for Trading the Earnings Surprises

1.       Use Zacks Earnings ESP. It's a proprietary formula that determines the likelihood of an earnings beat and is found on Zacks.com.

2.       Check the earnings history. Zacks.com has 5-year earnings surprise charts.

3.       Watch guidance.

4.       Prepare for "The Lurker."

They Beat, But Then What?

1.       Trex (TREX - Free Report) )

Trex is a decking manufacturer. With Americans still nesting at home, Trex recently reported a record year.

Trex recently beat on earnings and said that 2022 would see another year of double digit revenue growth.

But even with all the good news, Trex shares fell 10% the day after earnings. And Trex isn't even a tech company.

2.       Zoom Video (ZM - Free Report) )

Zoom Video hasn't missed since it went public in 2019. But all those earnings beats haven't boosted the stock.

Shares of Zoom Video are down 58% over the last 6 months. And shares were down even after the latest earnings surprise.

But Zoom Video is still not cheap. It's trading with a forward P/E of 30.

Does Zoom Video have further to fall?

3.       Home Depot (HD - Free Report) )

Home Depot recently beat on the Zacks Consensus Estimate by one cent. But a beat is a beat.

Unfortunately, the Street didn't think it was enough, and the shares sold off double digits on the report.

Home Depot shares are now down 20% in the last 3 months. It's cheaper after the sell-off, with a forward P/E at 19.7, but it's not dirt cheap.

Should traders be trying to trade a big-cap company like Home Depot?

4.       Asbury Automotive (ABG - Free Report) )

Asbury Automotive has beat 9 quarters in a row. It has a great earnings surprise track record during the pandemic.

Should traders be looking at a company's track record when jumping in during earnings season?

Asbury Automotive is one of Dave's big winners this earnings season in the Surprise Trader portfolio. It has also been a big winner for the last 2 years, gaining 114%.

Asbury is also dirt cheap, with a forward P/E of just 5.9.

5.       Boise Cascade (BCC - Free Report) )

Boise Cascade recently surprised again in the fourth quarter of 2021. It beat $4.26 versus the Zacks Consensus of $2.48.

It gave solid guidance but the shares sold off on the news.

Is Boise Cascade an example of "The Lurker" in the shares after an earnings report?

The shares have recovered and are now up 12.1% year-to-date.

Boise Cascade is also dirt cheap, with a forward P/E of just 5.7.

What Else Do You Need to Know about Trading the Earnings Surprises? 

Tune into this week's podcast to find out.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the "Internet of Money" and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we're still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks' has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

See 3 crypto-related stocks now >>

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