This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Earnings Stocks That Could Explode

Collective Brands

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

One final earnings short-squeeze play is Collective Brands (PSS), which is set to release numbers on Wednesday after the market close. This is a producer of compelling lifestyle, fashion and performance brands for footwear and related accessories to consumers worldwide. Wall Street analysts, on average, expect Collective Brands to report revenues of $868.02 million on earnings of 14 cents per share.

An analyst at DA Davidson cut their price target on Collective Brands recently ahead of the quarter but reaffirmed its their buy rating on the stock. The analyst cut their price target by $1 to $16, which is still a mile away from the stock's current price of just over $9.50 a share.

The recent strong earnings report out of Foot Locker (FL) could bode well for Collective Brands for this coming quarter. It doesn't hurt that the stock is also ridiculously beaten-down in front of the quarter, with shares off from its April high of $22.99 to its current price of just over $9 a share.

The current short interest as a percentage of the float for Collective Brands is an extremely large 25.8%. That means that out of the 56.22 million shares in the tradable float, 15.56 million are sold short by the bears. It's worth pointing out that the bears have increased their bets dramatically from the last reporting period by 22.5%, or by around 2.8 million shares. This is a huge increase in new shorts bets on a stock that's already heavily shorted. If the bears are pressing too much ahead of the quarter, then any good news could spark a massive short squeeze.

From a technical standpoint, the stock is currently trading significantly below both its 50-day and 200-day moving averages, which is bearish. That said, the stock just found some buying support and formed a temporary double bottom at around $9.11 a share on decent upside volume. If the stock holds that double bottom after they report, then we could have a bottom in place for the stock in the near-term.

I would look to be an aggressive buyer of this stock after they report if you see shares trade above some near-term overhead resistance at around $10.44 a share on heavy volume. I would look for volume that's either close to or greater than its three-month average action of 2 million shares. I would add to any long position above $12 a share and target a run back towards the 50-day moving average ($12.81) or $14 a share if the bulls take full control of this stock.

I would only short this name if it drops below $9.11 a share on big volume after the company reports. A drop below that near-term support zone could set this stock up for a test of the next significant support level at around $7.13 a share.

To see more potential earnings short squeeze candidates like Melco Crown Entertainment (MEPL), Aspen Technology (AZPN) and La-Z-Boy (LZB - Get Report), check out the Earnings Short Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.


Follow Stockpickr on Twitter and become a fan on Facebook. At the time of publication, author had no positions in stocks mentioned.
Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to and maintains the website, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.
6 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
PSS $21.72 0.00%
AZPN $37.47 -0.64%
GES $16.91 -4.60%
HAIN $45.00 0.25%
GSM $9.84 -0.61%


Chart of I:DJI
DOW 17,641.16 -10.10 -0.06%
S&P 500 2,046.67 -4.45 -0.22%
NASDAQ 4,712.4240 -13.2150 -0.28%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs