Historical Earnings Dates Help Investors Navigate Earnings Season
Earnings announcement of a Company is an important event for both investors and trader as well. Because earnings result is the determinant of the future price movement of a particular stock.Therefore, it is closely followed and analyzed. If you keep a close watch on the period approaching the earnings announcement date you will see increased volatility in the stock price and its traded volume. A few traders are always there who take speculative advantages of this situation using different earnings announcement as trading strategies.
How earnings histories help investors?
If you go through the history of earnings of a stock over different past earnings seasons, it could portray you a clearer picture about how far the earnings announcement of that particular stock may arrive the earnings estimates made by the analysts in the previous quarter. You can easily get a matrix of earnings estimates and earnings announcements of four fiscal quarters over the last three or five years. These historical earnings will give an indication about the present earnings season’s announcement.So, before entering into any speculative venture you should take help of earning history. However, there will always be uncertainty after taking all careful investment strategies.
How navigating earnings season help investor?
Depending on your pattern of trading or investing strategy, the historical earnings may affect your position. Here it is discussed how the historical earnings dates help different types of investors to track and analyze a Company’s earnings and make their investment strategy.
- Short-term investors
— If you are a short-term investor, it means you do not maintain an open position and earnings announcement does not affect you. But many traders watch the volatility of the price change as the earnings announcement leading to a date. As a short-term trader who usually holds the shares only for one to three days and knows very well when the earnings-related volatility may arise should follow the earning history of the stock. This may potentially stick you with the open position and checking the history of earnings can be a plus.
- Long-term investors
— If you are in the group of buy and hold investors, then you may be a least affected person by the earnings announcement. Long-term investors are rarely concerned about the short-term market volatility because of their time-band for investment may be quite long. But when there are several declining earnings announcements in a row you may be worrisome and interested to revisit the historical earnings dates. The trends in earnings declination might signal you the time to pare down the stock.
- Intermediate and swing traders
— This particular type of investors affected most by the earnings announcement. They typically hold the shares from a few days to a few weeks or even longer. As a result they bear a higher risk for holding the shares an open position leading to earnings announcement, unlike the short-term traders. They can also attempt watching the historical earnings dates to follow the historical earnings for their benefit to smooth out any bumps on the road.