Following up on Sunday's post on the best earnings surprises, we need to take a look at the biggest misses as well. Negative surprises are never good for stocks, obviously, but they are especially deadly because analysts are often aware of poor business conditions, yet underestimate how bad these can be. The names that are missing big should be avoided on the long side, and/or researched as short candidates. Here are the biggest misses so far this earnings season -- names that missed earnings per share by more than 20%.
Some of the gargantuan misses are more a function of a low denominator, such as Advanced Micro Devices (AMD) missing by 1,900%. The company really missed by $0.19 against an estimate for a $0.01 loss per share. Nonetheless, the implication is still the same: poor earnings.
The misses range across many groups, but commercial real estate was notable with the number of large misses. Names like Prologis (PLD), Corporate Office Properties (OFC), and Colonial Properties Trust (CLP) stand out. A fair number of financials also grace this list, such as E*Trade (ETFC), AllianceBernstein (AB) and TCF Financial (TCB).