The below is from Factset research. I am probably wrong in the following assertion, but the combination of the negative price bias and that the downtrodden tone to earnings is already know by the market may suggest price gains come earnings season. That is unless guidance and numbers come out even more negative than is assumed.
For Q4 2013, 94 companies have issued negative EPS guidance and 13 companies have issued positive EPS guidance. If these are the final numbers for the quarter, it will mark the highest number of companies issuing negative EPS guidance and tie the mark for the lowest number of companies issuing positive EPS guidance since FactSet began tracking the data in 2006. The percentage of companies issuing negative EPS guidance is 88% (94 out of 107). If this is the final percentage for the quarter, it will mark the highest percentage of companies issuing negative EPS guidance for a quarter. However, companies are guiding EPS estimates down by a lower margin than average. For Q4 2013, companies have issued EPS guidance that has been 5.7% below the mean EPS estimate on average. This percentage decline is smaller than the five-year average of -11.1%.
It is interesting to note that stock prices have come down on average not only for companies issuing negative EPS guidance, but also for companies issuing positive EPS guidance. The average price change (2 days before issuing guidance through 2 days after issuing guidance) for the 94 companies that issued negative EPS guidance for the fourth quarter was -1.5%, which is nearly double the average decrease over the past five years of -0.8%. However, the market reaction on average to the performance of the few companies that have issued positive EPS guidance has also been negative. For the 13 companies that have issued positive EPS guidance for Q4 2013, the average price change (2 days before the guidance was issued through 2 days after the guidance was issued) was -0.1%. This percentage is well below the average over the past five years of +3.0%, and marks the first time the average price change for companies issuing positive EPS guidance has been negative since Q4 2008 (-0.2%).
For Q4 2013, 94 companies have issued negative EPS guidance and 13 companies have issued positive EPS guidance. If these are the final numbers for the quarter, it will mark the highest number of companies issuing negative EPS guidance and tie the mark for the lowest number of companies issuing positive EPS guidance since FactSet began tracking the data in 2006. The percentage of companies issuing negative EPS guidance is 88% (94 out of 107). If this is the final percentage for the quarter, it will mark the highest percentage of companies issuing negative EPS guidance for a quarter. However, companies are guiding EPS estimates down by a lower margin than average. For Q4 2013, companies have issued EPS guidance that has been 5.7% below the mean EPS estimate on average. This percentage decline is smaller than the five-year average of -11.1%.
It is interesting to note that stock prices have come down on average not only for companies issuing negative EPS guidance, but also for companies issuing positive EPS guidance. The average price change (2 days before issuing guidance through 2 days after issuing guidance) for the 94 companies that issued negative EPS guidance for the fourth quarter was -1.5%, which is nearly double the average decrease over the past five years of -0.8%. However, the market reaction on average to the performance of the few companies that have issued positive EPS guidance has also been negative. For the 13 companies that have issued positive EPS guidance for Q4 2013, the average price change (2 days before the guidance was issued through 2 days after the guidance was issued) was -0.1%. This percentage is well below the average over the past five years of +3.0%, and marks the first time the average price change for companies issuing positive EPS guidance has been negative since Q4 2008 (-0.2%).
No comments:
Post a Comment