Excitement over the jobs report, as well as potential announcements from the Federal Reserve and European Central Bank, has passed. But now we've reached stage two of earnings season. While 81% of the S&P 500 companies have reported, many other secondary names are due to deliver over the next couple weeks, and there are opportunities to be had on both sides of the tracks.
Earnings season is always fun to work around, and always presents really good opportunities to catch the market by surprise.
In particular, momentum names tend to move sharply regardless of the group. Take LinkedIn (LNKD) last week, which soared after merely meeting expectations but providing solid guidance. Compare that with shares of Facebook (FB) and Zynga (ZNGA), which have largely disappointed since their respective numbers were revealed. We could see more of this over the coming days.
Names I have my eye on this week include Priceline (PCLN), Monster Beverage (MNST) and Disney (DIS). Recent earnings for these companies have been stellar, and while the U.S. economy is now seeing slower growth, I suspect this trio will once again pull out strong numbers. Priceline, for instance, is looking to continue its run as the leader in online travel. Yes, the stock is "pricey," but the company commands a growth rate that is above that of its peers.
Disney, for its part, is a strong player in the consumer discretionary segment, and its media franchise is second to none. Advertising revenue was strong at competitors CBS (CBS) and General Electric (GE)-owned NBC Universal, so I suspect this will have also been the case for Disney-owned ABC and its family of networks. Disney shares have been trading in the higher range lately, and are poised for more upside.
Lastly, Monster Beverage is in a very competitive space, but it continues to gain market share. The company has expanded its brand aggressively, and while many others are growing, it seems to be the strongest one in the segment. The recent pullback is a nice opportunity here to get long.
I'll post a couple of charts later on today.