Investing 102

[CRCRFT78]

Out of curiosity, would it be wise to buy into a stock thats reporting earnings on tuesday on monday or has the train already left the station.

[GregWeld]

Originally Posted by CRCRFT78

Out of curiosity, would it be wise to buy into a stock thats reporting earnings on tuesday on monday or has the train already left the station.

That's a GAMBLING question... how much do you know about the company -- are you willing to BET that the earnings report is going to be good?? Because if it isn't - you might get your butt crushed.

Anyone that bough GOOGLE before earnings -- just took a $50+ haircut...

So what you really need to ask yourself is ------ If the earnings are good -- and their forward comments are good -- am I INVESTING -- or am I trying to get the first .50 by gambling on an unknown?

Sometimes I'll buy AFTER earnings a day or two when I see which way the wind is blowing... 'cause I'm in it more for a couple years than just today.

[GregWeld]

Originally Posted by CRCRFT78

Out of curiosity, would it be wise to buy into a stock thats reporting earnings on tuesday on monday or has the train already left the station.

Good question by the way!

[WSSix]

Well, Halliburton has been hiring like crazy and I stay busy as crap most of the time, so we better report good earnings or else I'm going to want to know whose been spending all the money I bring in from the jobs I do, lol.

[billscamaros]

Earnings are announced every quarter, right? Are the earnings announced this week of greater significance than those announced throughout the rest of the year?

And the earnings that are announced this week set the tone for the dividends that are paid at the end of this quarter?

[GregWeld]

Earnings are every quarter -- but not all companies run on a calendar year... so really - there's an earnings report just about every day from "somebody"...

What earnings do is give you a peek into how things are going - in the company - and in the SECTOR as well.... You might own FORD stock - and pay attention to GM earnings... because they may say things that are indicative of how things are going overall for sales etc...

This is a broad based generalization of course - but if several big companies come out and report good sales and profits and have good things to say about going forward - then this can lift the market overall... and of course the reverse can happen.

+++++++++++++++++++++++++++++

Dividends are set per quarter... and are indicative of how the company is doing. Doing really well and feel good about the future of their earnings they may choose to increase the dividend. That is a really good indicator because they are saying that their income is growing enough to support that payout.

COMPANIES are loathe to reduce the dividend....because it says "we're not doing so hot"...

It's really not much different than a persons personal situation.... nobody wants to be in a Ferrari and then have to trade down to a Yugo... and the reverse is true as well -- IF a person feels good about their future earnings - they're likely to buy a better car (pay a higher dividend).

[GregWeld]

Originally Posted by WSSix

Well, Halliburton has been hiring like crazy and I stay busy as crap most of the time, so we better report good earnings or else I'm going to want to know whose been spending all the money I bring in from the jobs I do, lol.

Keep up the good work! Halliburton reported good numbers and I was looking for a quote from you in there somewhere...

[GregWeld]

So here's what I was saying about "THE FUTURE" as it pertains to a companies quarterly reports.... and these are - to me - far more important than what they did "this quarter". Because I'm an INVESTOR I want to have a feel for how my dividend is going to be paid going forward... that's what I'm buying - that dividend (earnings) stream...

So HALIBURTON comes out and says this quarter was good - they beat by a penny -- but then say - but going forward we may be impacted because of blah blah blah... Some of that talk is CYA - but some of it is right on the money because they are seeing something they don't like - so expect HAL to open down today and maybe trend down going forward


Here's a cut and paste...


Halliburton Co, the world's second-largest oilfield services company, posted a higher-than-expected quarterly profit and said its revenues would grow faster than oil and gas companies would drill this year.

Still, the company said its costs were rising, and that the industry shift away from dry gas and toward oil and natural gas liquids resources would hit its first-quarter earnings.

"We believe that reduced productivity and increased costs resulting from this relocation will be a short-term disruption for us and that the impact we saw in the fourth quarter will continue into 2012," Chairman and Chief Executive Dave Lesar said in a statement.

[Sieg]

HAL down 3.95% in the first five minutes.........

[GregWeld]

So let's just continue the "102" version of this thread....

Here's why EARNINGS are important -- but those FORWARD looking statements are even MORE IMPORTANT....

Let's continue to use Halliburton as todays example....

They beat on the earnings number - but made that caveat that going forward earnings might be impacted negatively...

When you couple this with a 1.02% dividend... so you don't have that nice "pay me while I wait for things to turn around"... "support level"... suddenly there's more sellers than buyers and the stock price declines.

IF --- it paid a 5% dividend - my guess is the stock would have hardly budged... They didn't say the business stunk - they just said it may have some impact yet they still managed to beat the earnings estimate - so it couldn't be "that bad"... But this is a stock that NEEDS that stock price GROWTH component - and if that's not there to offset that low dividend - then you get what you're seeing today... a decline.

Now -- if you're listening to the talking heads -- then you'll hear the words "it'll need some kind of CATALYST going forward". What they're saying is in layman's terms -- it will need a big business turnaround - or some big new oil field discovery or similar to get it going UP again. There will have to be some big news that will point to some event to get the GROWTH back in the stock price.