The earnings season is looming on the horizon. The moment when the cream of growth stocks within the stock culture rises to the top.
A solid earnings release can propel key stocks to previously unanticipated levels, while a disappointing ad may cause stocks to plummet. Being able to buy a stock when it is strong and growing is a key principle of how to invest in high growth stocks.
Companies report their results four times a year. The quarterly results provide investors with an opportunity to look closely at the company's performance. From there, analysts and professional fund managers use this information to project the company's future earnings and sales growth and create price targets for its share price.
The reaction of the stock market to the publication of the results can often tell you more than the results themselves. If the results look solid, but the stock is selling after hours, then investors may be concerned about the sustainability of growth, rising costs, or a myriad of other aspects. potential negatives.
Conversely, lower than expected results and a positive reaction could mean that the future of the company is bright, despite the unexpected slowness of the quarter.
Check out IBD's calendar of results for earnings forecasts, earnings due dates, investment action plans and stocks near the buying areas before the results.
Obvious gaps can lead to big gains
With the return of the stock market in a confirmed uptrend, following the Friday 7 day follow-up day last Friday, investors should now refine their list of potential stock ideas. Investors should closely monitor the best performing stocks in the coming weeks as their quarterly earnings are released. A positive result could trigger a decisive gap. This occurs when the demand for purchase far outstrips supply at current levels, resulting in a sharp rise in stock prices.
The MarketSmith Breakaway Gap report, a premium feature, highlights actions beyond potential purchase points, using MarketSmith's pattern recognition feature. When a stock is above a potential purchase point, an alert appears on the chart to inform you of the stock's bullish action. MarketSmith's daily and weekly charts illustrate Nasdaq market transactions before and after the sale. Once the company has declared a profit (good or bad), the chart updates the price changes in transactions over extended hours.
How to buy shares: Wingstop is preparing for a new flight
Restaurant chicken wings Wingstop (WING) created a decisive gap on August 3, 2018, with an increase of over 17%, rising above a flat-bottomed entry of 53.32 points. The catalyst? An increase in quarterly revenues higher than expected by 35% from one year to the next on a 17% sales gain. From the appropriate purchase point, the stock rose 35% to its all-time high of October 17th at 72.01.
Wingstop, a member of the IBD 50 stock list, will likely release its next results in mid-February. Analysts expect steady earnings per share at 17 cents a share for a $ 39.8 million business, up 41%. Management has made it clear to investors that the company is investing heavily in the future expansion of the market.
MarketSmith's graphical analysis places the highest growth stock about to be above a point of purchase of 72.11 points on a new identical basis.
According to IBD Stock Checkup, Wingstop has a composite score of 95 out of a maximum of 99 IBDs. Composite scoring is a mix of key metrics and key techniques. The IBD 50 identifies the top stocks with strong relative price and fundamentals resistance.
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