NEW YORK (TheStreet) -- MasterCard (MA) reports this week, but enough about that. In the lead-up to their earnings -- really, any earnings -- it's essential to take inventory of Wall Street sentiment, something the media rarely does. I know, I know: the media is dutiful in telling us the numbers; precisely where Wall Street earnings estimates stand. Sometimes it's all they do.
But I'm talking ratings: how many Wall Street firms are rating the stock a so-called Buy -- and how many a Sell? In the near term, a shift in rating can push a stock. But f everyone is already rating the stock a Buy, it may have no impetus to run. Similarly, if a high number have the stock rated a Hold or lower, there is a bit more potential. This is not a foolproof measure or, by any means, the only factor a trader should be examining in the prelude to an earnings report. But it is one and it is a little troubling that the media pays it little, if any, mind.
Motley Fool was typical, running a story called "How High Will MasterCard Fly?" without looking at the proportion of buy ratings. Fox told us that MasterCard and fellow credit-card company Visa (V) were going to report, as well as Pfizer (PFE), CBS (CBS), Cablevision (CVC) and Time Warner (TWX) but they didn't give us one-thin clue about the ratings breakdown going into the report.Break it down. Forbes, to its credit, did: "In fact," they wrote, "the brokerage community has doled out a whopping 25 Buy ratings, compared to 10 Holds, and no Sells." On this issue, central to our understanding of how stocks might react in the hours and days after issuing earnings, Forbes clearly shows the way.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV