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Must-Watch Earnings Releases for Friday

NEW YORK ( TheStreet) -- These top five earnings releases before the weekend are all market-moving candidates.

I examine each one based on key metrics and provide an estimate on stocks I have crunched the numbers with.

MRK Chart MRK data by YCharts

Merck (MRK - Get Report)

Who They Are: Merck is a global pharmaceutical company. Its stock have an average daily trading volume of 19.1 million shares, and the company has a market capitalization of $132 billion.

52-Week High: $44.19

52-Week Low: $29.81

Float Short: 0.77%

Book Value: $18.03

Price-to-Book Ratio: 2.31

Merck is anticipated to report better second-quarter earnings before the market opens on July 27, 2012. The current consensus estimate is for earnings of $1.01 a share, an improvement of 6 cents (5.9%) from 95 cents during the same quarter last year.

More than half the analysts covering Merck rate it a buy or strong buy. Twelve of the 18 analysts covering the stock give it a buy rating, while six rate it a hold and none rate it a sell. The stock has appreciated 20% in the last year, and the average analyst target price is $44.75.

The trailing 12-month price-to-earnings ratio is 11.3. Investors are receiving $1.68 in dividends for a fat yield of 3.87%.

In the last month the stock has climbed 8%, and the shares have burned up the chart in 2012. The moving averages are in a bullish trend pattern that is just getting started. I am not a fan of Obamacare, but Merck is a winner as a result of the legislation, at least for now.

There are a couple of ways for an investor to mitigate risk going into earnings. One is to sell $44 strike call option against some or all shares owned in a covered-call strategy. I like the $45 August calls for 19 cents for an aggressive approach. The $44 strike can be sold for a more defensive posture.
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SYM TRADE IT LAST %CHG
ACI $5.44 -16.00%
CVX $76.99 -1.60%
DHI $30.47 -2.60%
MRK $51.91 -1.40%
WY $27.48 -1.50%

Markets

Chart of I:DJI
DOW 16,177.47 -197.29 -1.20%
S&P 500 1,923.66 -27.47 -1.41%
NASDAQ 4,688.17 -45.3270 -0.96%

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