Homebuilders Beazer, Ryland Join Exxon, McKesson, Old Dominion

NEW YORK (TheStreet) - Five companies will report their quarterly results before the opening bell on Thursday.

The biggest winner year to date is health care supply manager and IT company McKesson (MCK) up 18%, closely followed by trucker Old Dominion (ODFL) with a gain of 16%.

Dow component and oil giant Exxon Mobil (XOM) is up just 2.3% year to date.

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The biggest losers are the homebuilders with Beazer Homes (BZH) down 28% year to date and Ryland Group (RYL) down 17%. They are performing worse than the housing market index, which is down 5.2%.

Let's take a look at the stock profiles. Two "crunching the numbers" tables follow.

Beazer Homes ($17.70) traded as high as $25.34 on Jan. 3 and as of 1:30 P.M. Wednesday has traded as low as $17.07. The stock is below all five key moving averages in the first "crunching the numbers" table.

Analysts expect the company to report a quarterly loss of 15 cents a share. Beazer does not have a 12 month trailing price-to-earnings ratio and does not pay a dividend.

The weekly chart is negative with its five-week modified moving average at $19.02 and its 200-week simple moving average at $17.76. A semiannual value level is $13.24 with semiannual and quarterly risky levels at $19.47 and $21.17, respectively.

McKesson ($191.09) set an all-time intraday high at $195.20 on July 25 and is above all moving averages in the first table.

Analysts expect the company to report earnings of $2.34. McKesson has a 12 month trailing P/E of 22.2 with a dividend yield at 0.5%.

The weekly chart is positive but overbought with its five-week MMA at $188.27 in a parabolic pattern. Quarterly and semiannual value levels are $182.73 and $170.88, respectively, with a weekly pivot at $188.99 and a monthly risky level at $196.10.

Old Dominion ($61.71) set an all-time intraday high at $65.35 on June 9. The stock is below its 50-day SMA at $63.07 and above its 200-day SMA at $55.82.

Analysts expect the company to report earnings of 82 cents. Old Dominion has a 12 month trailing P/E of 24.1 but does not pay a dividend.

The weekly chart shifts to negative with a close on Friday below its five-week MMA at $62.34. Semiannual and annual value levels are $55.49 and $40.44, respectively, with a weekly pivot at $62.76 and semiannual and quarterly risky levels at $64.37 and $66.46, respectively.

Ryland Group ($35.85) failed at a test of its 200-day SMA at $40.00 on July 1 and traded as low as $34.59 as of 1:30 P.M. Thursday afternoon.

Analysts expect the company to report earnings of 70 cents. Ryland has a 12 month trailing P/E of is 10.6 and dividend yield at 0.3%.

The weekly chart is negative with its five-week MMA at $37.68. The 200-week SMA is $28.20 with a semiannual pivot at $35.95 and weekly and monthly risky levels at $38.87 and $41.69, respectively.

Exxon Mobil ($103.55) set an all-time intraday high at $104.76 on Tuesday then returned to its annual pivot at $103.05 intraday on Thursday. The stock is above all five moving averages in today's first table.

Analysts expect the company to report earnings of $1.91. Exxon has a 12 month trailing P/E of 13.5 and a dividend yield at 2.6%.

The weekly chart shifts to negative given a close on Friday below its five-week MMA and at $102.40. A semiannual value level is $100.68 with an annual pivot at $103.05 and monthly and semiannual risky levels at $107.92 and $121.02, respectively.

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Crunching the Numbers with Richard Suttmeier: Moving Averages & Stochastics

This table provides the technical status for the stocks profiled in today's report.

The 12 month trailing price to earnings ratio

The Dividend Yield

There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.

The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.

Interpretations: Stocks below a moving average are listed in red.

Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.

A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.

A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.

A stock with a neutral technical rating has a profile that is not positive or negative.

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The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three to five year horizon.

The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.

The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.

The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six to 12 month horizon.

Crunching the Numbers with Richard Suttmeier: Earnings & Where to Buy & Where to Sell

This table presents the EPS estimates including date and before or after the close, and where to buy on weakness and where to sell on strength.

Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.

Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.

At the time of publication the author held no positions in any of the stocks mentioned.

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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TheStreet Ratings team rates MCKESSON CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate MCKESSON CORP (MCK) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, solid stock price performance and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • MCK's revenue growth has slightly outpaced the industry average of 16.0%. Since the same quarter one year prior, revenues rose by 25.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MCKESSON CORP has improved earnings per share by 40.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, MCKESSON CORP increased its bottom line by earning $5.83 versus $5.62 in the prior year. This year, the market expects an improvement in earnings ($10.61 versus $5.83).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 43.2% when compared to the same quarter one year prior, rising from $259.00 million to $371.00 million.
  • Powered by its strong earnings growth of 40.54% and other important driving factors, this stock has surged by 63.41% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Net operating cash flow has increased to $2,664.00 million or 20.70% when compared to the same quarter last year. Despite an increase in cash flow, MCKESSON CORP's average is still marginally south of the industry average growth rate of 21.00%.

Richard Suttmeier is the chief market strategist at ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.

Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.

Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.

Click here for details on Suttmeier's "Buy and Trade" investment strategy.

Richard Suttmeier can be reached at RSuttmeier@Gmail.com

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