Earning seasons are an excellent way of staying in the loop about future investment opportunities. Depending on your interest as an investor you get a lot of information from an earnings season that will point you to the right investment vehicle.
The earning season matters so much to investors since it’s all about numbers; profits made, losses incurred, expected earnings in the next quarter. The reports also include reasons that might have caused losses or gains. From these numbers, you will be in a better place to know which stock bandwagon to join or which digital currency to buy. These reviews are done by experts who have years of experience and give investors an upper hand when making investments. Apart from helping early investors know what their shares are now worth, it gives them an opportunity to weigh their choices. It will also help decide whether to invest or pull out.
Trends to Look at During Earning Season
But the question is all these analysts’ reviews and reports are pure numbers, what can you look at to know which direction to follow? During these seasons take a look at the bellwether companies, management outlook, and earnings surprises. An earnings surprise is just a company making more profits than the prediction made by analysts. Through the use of different methods, the analysts predict the earning of a firm. But if the gains are higher, it becomes an earnings surprise.
On the other hand, when it comes to management outlook, it is their view on the next quarter earning per shares. Stocks are forward-looking in the sense that prices reflect where investors expect to put their money to. Although the management might see revenue increasing they can also see a stagnant market or a slowdown in the prices which can translate to loses.
Besides the above, the direction of bulls in a herd depicts the course of the whole herd. When it comes to stocks, blue-chip companies are the bulls, and they always lead the others in the industry. Also known as bellwether companies, if these stocks are showing a positive outcome come next quarter; other stocks are always behind them. This means if you follow the stock you will increase your profits.
The above are just simple ways that show how the market might react in the next quarter. Although keeping tabs on all the above among other tell off signs might be hard, why not use eToro services. The latter offers a simple way of keeping tabs on all market trends at your fingertips. Furthermore, they are opening up the financial industry by giving account holders a social trading network which comes with investments tools and innovative trading techniques.
The above techniques are only to act as your guide, so before making investments decision, it is good to study the market and reports keenly. Similarly, before making the final decision combine several reports and analysis then draw your line and proceed to make your investments.
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