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BOSTON (TheStreet) -- Several stocks that trade for less than $5, including Sprint Nextel (S) - Get Free Report, have had their earnings estimates increased or decreased by analysts, only to see their share prices head in the opposite direction. That presents investors with an opportunity, as those companies release financial results this week.

Cheap stocks typically rise in volatility amid earnings releases, as evident last week in

Westell Technologies

(WSTL) - Get Free Report






(INFN) - Get Free Report


As noted last week,

analysts were revising-up quarterly estimates



(AAPL) - Get Free Report



(HOG) - Get Free Report

, although share prices weren't moving in concert. That disconnect paid off for investors who followed analysts' moves, at least in the small sampling.

Predicting the direction of equities based on a quarterly-earnings report is a toss-up.

Bespoke Investment Group

said information collected over the past nine years shows that a stock has risen in 32,563 instances, or 49.9% of the time, on the day a company reports earnings. A winning trade has the same chances as a coin flip.

To improve the odds, perhaps, here are five stocks trading under $5. They belong to companies reporting earnings this week in which a disconnect exists between the share-price movement and analysts' earnings per share revisions over the past month.

Sprint Nextel

shares have risen in the past month, thanks to better-than-expected sales by the


EVO 4G handset, considered a top rival to Apple's iPhone 4. After Sprint reported second-results last year, its stock jumped almost 10%. Still, the shares fell on second-quarter numbers in the three previous years.

Report Date:

July 28, before market opens

One-Month Revisions to EPS:

Eight research firms have cut their loss estimates for Sprint Nextel over the past month, including Morgan Stanley, Oppenheimer and Goldman Sachs. UBS raised its second-quarter target to a loss of 7 cents a share from 9 cents, making it the only firm to increase its estimate in the past month.

One-Month Stock Performance:



A Thomson Reuters survey of 25 analysts show they expect Sprint will report a loss of 19 cents a share. Wells Fargo Securities analyst Jennifer Fritzsche reiterated her "outperform" rating on Sprint ahead of the earnings release.

Office Depot

(ODP) - Get Free Report

earlier this month said it would not bid for the U.S. Communities contract when it expires at the end of this year due to "onerous" terms. Instead, Office Depot will bid on individual state customers like Florida and Arkansas. Some analysts remain concerned the office-supply retailer will lose key accounts, although the shares have surged 13% over the past five trading sessions.

Historically, Office Depot's stock falls on second-quarter earnings. They have done so dating to 2006.

Report Date:

July 27, before market opens

One-Month Revisions to EPS:

Three analysts have cut their earnings estimates for Office Depot over the past month. No one has raised his forecast. Among the biggest change in EPS forecasts, FBR Capital Markets dropped its second-quarter target to a loss of 22 cents a share from a loss of 16 cents.

One-Month Stock Performance:



On average, Office Depot will report a loss of 17 cents a share, based on a Thomson Reuters survey of 18 analysts. On Monday, Piper Jaffray analyst Mitchell Kaiser reiterated a "neutral" rating on Office Depot in a preview of the second-quarter earnings report, citing uncertainty over the retailer's cost-cutting initiatives and contract outcomes.

RRI Energy


agreed on April 12 to merge with


( MIR) in a $1.6 billion stock-swap deal that will create GenOn Energy. Earlier this month, the Justice Department said it wants more information on the merger, although the stock has jumped 6% since the request.

RRI Energy shares rose on second-quarter results in 2009, 2007 and 2006.

Report Date:

July 30, before market opens

One-Month Revisions to EPS:

Three analysts have raised their quarterly earnings estimates for RRI Energy, including Macquarie Research, while only one (at UBS) has cut his target.

One-Month Stock Performance:



Based on an average of 10 estimates, analysts expect RRI Energy to report a quarterly loss of 13 cents a share.

Silicon Motion Technology

(SIMO) - Get Free Report

on July 8 announced preliminary results for the second quarter, saying it expects revenue to increase sequentially between 23% and 25%. That compares with the chipmaker's previous guidance that revenue would be up 10% to 20% sequentially. The shares jumped 12%, although the stock is still lower over the past month.

In previous years, Silicon Motion shares have lost ground on second-quarter results in each of the past three years, taking an especially sharp tumble in 2008.

Report Date:

July 29, after market closes

One-Month Revisions to EPS:

Three research firms have increased their earnings targets in the past month, while one has reduced its forecast. Those with more favorable earnings forecasts include Pacific Crest Securities and Lazard Capital Markets.

One-Month Stock Performance:



The mean of seven analysts estimates shows that Silicon Motion should report a quarterly profit of 4 cents a share. On Monday, Auriga USA analyst Jie Liu reiterated a "hold" rating ahead of the chipmaker's second-quarter earnings report, noting the company has a balanced risk/reward profile for the second half of 2010. Liu expects Silicon Motion to post a profit of 10 cents a share for the second quarter.

Taser International


shares dropped 5% on July 1 after the electronic-weapon-device company said it expects second-quarter revenue to drop 15% from a year earlier due to a delay in international orders. Despite the disappointing forecast, though, Taser shares have gained in the past month.

Looking back, Taser shares have fallen in each of the past five years during the trading session after the company reports second-quarter results.

Report Date:

July 27, before market opens

One-Month Revisions to EPS:

Four out of the five analysts covering Taser cut their earnings targets in the past month, including JPMorgan and Dougherty & Co.

One-Month Stock Performance:



The consensus target is for a loss of 3 cents a share, according to Thomson Reuters. Merriman Curhan Ford analyst Eric Wold lowered his second-quarter estimate in June before Taser preannounced "on the concern about an apparent lack of large announced orders in the quarter." Wold noted earlier this month that "apparently our reduction was not aggressive enough."

-- Written by Robert Holmes in Boston.


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