Oracle Corp. (NYSE:ORCL) is expected to report earnings on Thursday, June 20th. The whisper number is $0.89,two cents ahead of the analysts' estimate. Whispers range from a low of $0.88 to a high of $0.94. ORCL has a 63% positive surprise history (having topped the whisper in 35 of the 56 earnings reports for which we have data).
Earnings history:
- Beat whisper: 35 qtrs
- Met whisper: 1 qtrs
- Missed whisper: 20 qtrs
Our primary focus is on post earnings price movement. Knowing how likely a stock's price will move following an earnings report can help you determine the best action to take (long or short). In other words, we look at what happens when the company beats or misses the whisper number expectation.
The table below indicates the average post earnings price movement within a one and thirty trading day time frame:
(Click to enlarge)
The strongest price movement of +1.4% comes within ten trading days when the company reports earnings that beat the whisper number, and +3.9% within thirty trading days when the company reports earnings that miss the whisper number. While the overall average price move is positive (beat the whisper and see strength, miss and see strength), there is a negative price move through ten trading days when the company reports earnings that fall short of the whisper number.
The table below indicates the most recent earnings reports and short-term price reaction:
(Click to enlarge)
In the comparable quarter last year the company reported earnings six cents ahead of the whisper number. Following that report the stock realized a 2.7% loss in five trading days. Last quarter the company reported earnings four cents short of the whisper number. Following that report the stock realized a 3.8% loss in five trading days, but turned and realized a 2.0% gain in twenty trading days. Overall historical data indicates the company to be (on average) a 'positive' price reactor when the company reports earnings.
Enter your expectation and view more earnings information here, or let us know your expectation in the comments section below.
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Since 1998, WhisperNumber.com has been tracking and publishing "crowd sourced estimates" for earnings. We call these earnings expectations whisper numbers. Our whisper numbers are gained from individual investors and traders just like you that have registered with our site. While the whisper number itself is an important part of our analysis, a company's "price reaction" to beating or missing the whisper number expectation is the key. On average, companies that exceed the whisper are "rewarded," while companies that miss are "punished" following an earnings report. Trading on whispers is a technical play on market psychology, rather than a bet on a company's fundamental strengths.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
John Scherr
John Scherr is the founder and President of WhisperNumber.com, an independent financial research firm focused on earnings expectations. He is a regular contributor to Fox Business Network, and has been featured in Barron's, the Wall Street Journal, and MarketWatch. He is considered a leading expert on 'whisper numbers' and post earnings price movement analysis.Since 1998, WhisperNumber.com has been the leader in social media analytics ('crowd sourced estimates') for earnings. Receive email alerts on those companies most likely to move higher or lower when they beat or miss the whisper number. These are the Whisper Reactors (https://www.whispernumber.com/signIn_wr.jsp).When earnings season gets underway, traders, analysts and investors are watching closely to see if companies' results squared with Wall Street's expectations. Of particular interest is the "whisper number". A veteran in the business, WhisperNumber.com takes a unique approach: its earnings estimates come from regular polling of its members. The site points to independent academic studies supporting its claims that the crowd is wiser than the Wall Street priesthood (www.whispernumber.com/study.jsp). WhisperNumber.com's free registration buys voluminous information related to the profit histories of companies entering earnings season. Type a ticker into its search engine for an exhaustive earnings profile of a company, alongside a calendar of coming earnings and an education center with whisper strategies for trading. A subscription payment of $149 for six months buys access to the company's premium offering, Whisper Reactors (http://www.whispernumber.com/signIn_wr.jsp), a list of highly volatile companies whose prices show a high correlation to their earnings outcomes.WhisperNumber.com claims a variety of double-digit returns for different types of plays over holding periods of 1-to-30 days. Trading on whispers is a technical play on market psychology, rather than a bet on a company's fundamental strengths. To a technician, share price is just a market-clearing mechanism that strikes a balance between buyer greed and seller fear.
