Watch out. Earnings season is an exciting time for investors who see an opportunity to benefit from mispricings and high (or low) expectations that fall short. If you're interested in trading earnings mispricing this week (Feb 26-29) we made a list that might help you round out your research.
While history is no guarantee of future performance, we compiled a list of stocks reporting later this week that have a history of disappointing investors with an average earnings surprise of at least -5% over the last five quarterly reports. Do you think the market is still overvaluing these names?
Use this as a starting point for your own analysis. List Average 1-Year Return: 9%
1. Expeditors International of Washington Inc. (EXPD): Provides logistics services in the United States and internationally. Market cap at $8.53B, most recent closing price at $40.81. In Dec 2011: Reported EPS at 0.43 vs. estimate at 0.47 (surprise of -8.5%). In Mar 2012: Reported EPS at 0.36 vs. estimate at 0.4 (surprise of -10%). In Jun 2012: Reported EPS at 0.39 vs. estimate at 0.43 (surprise of -9.3%). In Sep 2012: Reported 0.42 vs. estimate at 0.43 (surprise of -2.3%. [Average earnings surprise at -7.53%]. Reporting 2/26 2. Hospitality Properties Trust (HPT): Engages in buying, owning, and leasing hotels. Market cap at $3.31B, most recent closing price at $26.75. In Dec 2011: Reported EPS at 0.78 vs. estimate at 0.79 (surprise of -1.3%). In Mar 2012: Reported EPS at 0.78 vs. estimate at 0.79 (surprise of -1.3%). In Jun 2012: Reported EPS at 0.75 vs. estimate at 0.83 (surprise of -9.6%). In Sep 2012: Reported 0.74 vs. estimate at 0.78 (surprise of -5.1%. [Average earnings surprise at -4.32%].
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