Who is next to tank after profit increase?

[juw177]

These are the ones that caught my attention recently:

Today: CBA
Yesterday: COH, JBH
The day before: UGL

Just a thought: in this market, would it be a good strategy to short a stock just before they report profits and buy it back after the news release?

 

[TMC19]

I think AMP are reporting tomorrow.

 

[Aviator33]

MGR was also a good one from yesterday.

Just a thought: in this market, would it be a good strategy to short a stock just before they report profits and buy it back after the news release?

I'm sure many people are following exactly that strategy but given how bizzare the market is acting at the moment I don't think I would personally take the risk of a gap up in the opposite direction. It's just far too strange right now.

<HINDSIGHT>
Having said that, shorting CBA at close yesterday probably would have been a pretty safe bet
</HINDSIGHT>

Aren't RIO reporting today?

 

[juw177]

There are a few that gap up too, like CRG today for example.

I am not sure how the numbers fit with the valuations though but it seems to me that there is no rational explanation for the strength of the moves.

 

[nomore4s]

There are a few that gap up too, like CRG today for example.

I am not sure how the numbers fit with the valuations though but it seems to me that there is no rational explanation for the strength of the moves.

And CPU and I was short as well, lol

 

[juw177]

And lets take a look at today: XAO up over 100 points, green everywhere, yet companies that posted their profit increases today are in the red... AMP, PMP, ASX.

Though some exceptions like RIO.

 

[Santob]

Leighton: LEI

 

[kengaikl]

I shorted a day CBA before their profit anouncement. Its wierd that the day before CBA actually went up. Donno what people were thiking. Every time the big 4 release their profit results they end up disappointing the market. Yet alone this time where interest margins were being squeezed by the credit crunch.

 

[Bill M]

I shorted a day CBA before their profit anouncement. Its wierd that the day before CBA actually went up. Donno what people were thiking. Every time the big 4 release their profit results they end up disappointing the market. Yet alone this time where interest margins were being squeezed by the credit crunch.

Hey Ken, totally agree, profits and dividends up but people sell off, up to them I say. Today it was AMP, what I don't ever understand is why would people buy the stock at $11 and then be happy to sell at $7.75 cum dividend?

Gamblers, blockheads or what?:headshake

 

[Aviator33]

Gamblers, blockheads or what?:headshake

Hey Bill

From my very limited experience, at the moment I personally think it's more to do with short term advantages. Anything that even slightly comes up short of analyst expectations gets slammed. Even if you outperform you get slammed.

Seems like the reverse of the resources a few months ago. Back then you release a report saying you found a pile of mud with some crud in it and your SP goes up 500%. Right now it seems any profit report is a short sellers dream. Not justifying it, just going with the herd as I suspect many are.

Cheers
AV

 

[ithatheekret]

Have Aristocrat leisure or Icarus , I mean Flight Centre reported yet ?

Don't follow them .

 

[Mofra]

NAB's exposure to the retracting UK property market & their one-time decision to self-insure must surely have an impact on any profit guidance for the next 12 mths.

 

[Kauri]

couldn't find a suitable thread for this so will put it here.. unless a Mod wants to move it.

A query for the Fundementalists...
Was wondering, if the credit problems persist, will we see more widespread fallout than just the banks, property, utilities??
NOT SUGGESTING THEY HAVE PROBLEMS>> but would a mob say like QAN feel the pinch from a slowing world economy combined with POO... and possible credit charges... Are they highly geared..I guess some of their planes are leased, would the lease terms be up for renegotiating at all or are they set.. what longterm and shortterm debt would they carry on plane ownership and would it fall due for renegotiation???
What sort of terms will they get for their upcoming plane replacement programme???
Just looking around to see what Co's may be affected next..
Cheers
.........Kauri

 

[Rainmaker2000]

I guess this is the question many of us are asking.......since we all knew about the sub-prime thing like this time last year.....but its only in the last 3 months our market decided that sub prime means something....

The unifying theme through the hard hit companies so far is lack of assets and use of debt......'assetless' companies like banks and retailors have been hit brutally as have companies with high debts combined with hard assets like Centro.

I would have thought the falls have already happened so not too sure about your Qantas example.....I will say though, going forward the 'cream' companies will rise to top and continue to deliver while the companies with marginal economics and patchy cashflow will be punished perhaps too much......I would have though QAN would fall in the first category......the good companies can pass on their higher costs while the marginal companies get squeezed....

Keep in mind, Buffett would never own an airline stock and I follow him on this one......just too cyclical, too many variables

 

[Kauri]

I guess this is the question many of us are asking.......since we all knew about the sub-prime thing like this time last year.....but its only in the last 3 months our market decided that sub prime means something....

The unifying theme through the hard hit companies so far is lack of assets and use of debt......'assetless' companies like banks and retailors have been hit brutally as have companies with high debts combined with hard assets like Centro.

I would have thought the falls have already happened so not too sure about your Qantas example.....I will say though, going forward the 'cream' companies will rise to top and continue to deliver while the companies with marginal economics and patchy cashflow will be punished perhaps too much......I would have though QAN would fall in the first category......the good companies can pass on their higher costs while the marginal companies get squeezed....

Keep in mind, Buffett would never own an airline stock and I follow him on this one......just too cyclical, too many variables

Just saw this on Blooberg....
http://www.bloomberg.com/apps/news?pid=20601087&sid=auw3W9yFchNc&refer=home

 

[GREENS]

A query for the Fundementalists...
Was wondering, if the credit problems persist, will we see more widespread fallout than just the banks, property, utilities??

I think the next big thing to worry about fundamentally is a fall in resource stocks which could continue to drag down the entire market. If there comes news out of China that some of their major financial institutions have exposures to the subprime mess or that the effects of the US slowdown are going to drag down the growth of China more than anticipated then think of the blood that will be spilt onto commodity trading floors. This could possibly send a shockwave through commodity markets (probably not gold). Especially considering that many commodities are seen to have a fair bit of hot money chasing them already at the moment. A lot of market commentators are considering the Australian market cheap at the moment, trading on a PE of around 12.5, which I must agree. But if commodity prices get hit hard in the short term then the earnings of our resource companies which make up a major weighting of the index will fall quite considerably in such a high cost environment. This then has the potential to not only drag down the rest of the market with it but make a market that looks cheap at the moment based on its PE, look quite expensive. I must say however that if this did eventuate it would only be a short-medium term slump (i.e. anywhere from 6 to 24 months) in what I believe would just be a major correction in a long term commodity bull market i.e. once the subprime mess is dealt with the commodities bull would continue its upward trend. There are also a handful of mining companies out there that have considerable debt on their balance sheets in expectation that commodity prices will remain strong over the foreseeable future, not really taking into account a medium term correction, which could also add to the pain. If mining companies earnings go down the gurgler then down goes all those stocks that are somehow linked to the profits of the mining boom. Although at the moment China looks as solid as a rock, I’m a bit hesitant to jump back into the market and particularly the resource sector that has been dragged down with the rest of the market because if China does experience slower growth than markets have factored in then the resource sector could pull down the market even more and even carry the other sectors further down. On the upside however if China does remain solid then buying resource stocks that have fallen with the overall market even though commodity prices have gone through the roof, would surely be a very profitable strategy. Me thinks the best strategy at the moment is to stay on the sidelines and watch it all unfold, because really does anyone know the extent of the problems going on at the moment and when they will end. Everything is going from bad to worse at the moment.

Reality or not, just some thoughts that have been ticking over in my brain the past few days. Criticise at will.

 

[Rainmaker2000]

I agree to large extent......since I thought the end of our bull market would be led by resources and then financials.....I've been a little surprised financials have been hit so much while the resource cycle continues to run....

I'm not convinced i will be proven wrong and that we are in a bear market....either way, there is much to worry about when the commodity cycle turns

 

[ozambersand]

My concern about the resources and China is not so much a decrease in demand, but an ability for China to control the price of the commodities by buying a big enough stake in our mines. They are not only looking at targets here but also in Africa and other resource rich countries.