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One potential earnings short-squeeze play in the printing services complex is
Quad/Graphics(QUAD - Get Report), which is set to release numbers on Wednesday after the market close. This is a global provider of print and related products and services that are designed to provide integrated multichannel solutions to marketers and publishers in North America, Latin America and Europe. Wall Street analysts, on average, expect Quad/Graphics to report revenue of $937.84 million on earnings of 15 cents per share.
If you're looking for a high-yielding beaten-down bear favorite ahead of its earnings report, then make sure to check out shares of Quad/Graphics. This stock has plunged 36% in the last six months, and shares are currently trading just one point off its 52-week low of $11.25 a share. This stock sports a bountiful dividend yield of 8.2%.
The current short interest as a percentage of the float for Quad/Graphics is extremely high at 25.2%. That means that out of the 22.29 million shares in the tradable float, 5.04 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 13.5%, or by about 597,000 shares.
From a technical perspective, QUAD is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock has sold off hard from its March high of $16.24 to its recent low of $12.01 a share. That said, during the last month and change shares of QUAD have found buying interest at around $12 a share. If that level can hold up as support post-earnings, then this stock could see a powerful snapback rally.
If you're a bull on QUAD, then I would wait until after they report and look for long-biased trades if this stock can hold $12 and then move back above its 50-day moving average of $13.36 a share with high-volume. Look for volume on that move that registers close to or above its three-month average action of 276,676 shares. If we get that move, then QUAD could make a run at $15 to $15.33 or possibly its 200-day moving average of $16.10 a share.
I would avoid QUAD or look for short-biased trades if the stock fails to trigger that move, and then drops back below that major near-term support at $12 a share with high-volume. Target a move lower below its next major support level at $11.03 a share if the bears gain full control of this stock post-earnings. A move below $11.03 would mark an all-time low for QUAD and certainly set this stock up for some capitulation selling.