Investments

Asked by Anonymous

Updated 3w ago

Is it best to sell stocks before or after quarterly reports?

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Leonard Tan
Leonard Tan,
Level 6. Master
Updated 3w ago

I think Jansen pretty much explained the typical reactions of stock movement towards quarterly reports. To value add to his point, I think its pretty interesting to see how market reacts to companies that have been forecasted to peform poorly. I want to bring up Snapchat's price actions against their quarterly report aka 10Qs.

For Snapchat, their recent quarter results sent stocks soaring 22% purely from after-hours trading, despite DAUs has been shrinking consistently. The company ended the year with 186 million daily users, down from 187 million users a year earlier.

To quote, "But the number was the same as it had in the third quarter of last year, marking the first time in three quarters that Snap’s daily user count hadn’t fallen."

Of course, rev growth and EPS losses were better than expected, but it was still interesting to see immense capital gains potential from a stock with consistent negative sentiment.

Recent earnings call for Grubhub was also pretty interesting. 10Q results was taken up with dissapointment with a immediate steep selloff of -20%, missing multiple analysts projections and prev quarter's guidance. However 1 day later investor earnings call address managed to spin $GRUB was on track in their growth plans, resulting in a delayed correction in stock price back to initial levels.

Note the sharp drop, near the bottom was the investor earnings address.

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David Lim
David Lim

08 Apr 2019

Great Charts!

This is a really interesting question, I don't have an answer for that actually but here's another thought for you.

If I had the time and money, something that I would do is to gather all the Ex-Dividend date and closing price, match it with the dividend paid so as to attain the general trend of whether the magnitude of decrease in price (if there is the occurence of one) of Ex-Dividend stocks is higher or lower than that of the dividend being paid.

There are some counters that simply have no movement despite it being and XD counter. Definitely a statistic I would like to find out. If there is a system of such power, it can certainly gather data on FY announcement and monitor how prices move in relation to the reports

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David Lim
David Lim

08 Apr 2019

Hey Billy the suggestion you provided sounds quite interesting! when I am free I might try to pull such data for fun haha
Jansen Ng
Jansen Ng,
Level 4. Prodigy
Updated 3w ago

It really depends on your outlook to the company. Typically companies have an expected earnings amount that shareholders and analyst expect of them. If you feel that the company will fall short of the expected earnings, then sell before the report is out. But if you feel the company can outperform expectations, then sell after the report.

Stock prices are all based on expectations. My bet is to just find a company with good fundamentals, and hold, and not to worry about when they release their reports, because we could never accurately guess the outcome.

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David Lim
David Lim

08 Apr 2019

Thanks for your inputs! :)

Neither.

The best time to sell is when the stock is overvalued.

And especially better, when everyone is being very greedy.

That is the best time to sell.

Dont try to time the market.

Focus on spending more time in the market instead. 😊

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David Lim
David Lim,
Level 4. Prodigy
Answered on 03 Apr 2019

Hi Anon! I don't think you can really tell. Like what Jansen has mentioned, it would be quite tough to tell just like that. Sentiments before the quarterly reports can be an indicator, but after the reports are released it probably can go either way.

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