Amid significant market uncertainty, earnings season has led to significant volatility. As I warned last week, stocks such as Shopify Inc. (TSX: SHOP)(NYSE:SHOP) can see significant losses post-earnings. Although the company beat earnings estimates, its slowing growth took center stage. Shopify’s share price dropped almost 10% on the day of earnings.
Although I do not recommend trading around earnings, it’s still very important to keep up to date on your investments. With that in mind, here are three stocks poised to make moves post earnings.
Goeasy Ltd. (TSX: GSY)
One of my favourite growth stocks reports earnings this coming Tuesday, August 7. Goeasy has been on a tear, returning approximately 17% year to date.
The company has already telegraphed what to except with second-quarter results. On July 12, the company released preliminary Q2 results. This is out of the norm for the company. So why make this announcement? The company was seeking additional financing and to support investor interest, it opted to give a sneak peak at its impressive Q2 results. As such, it also had to disclose these results to the broader market.
Outside of outstanding growth metrics, the company added this tidbit to its statement: “To reflect this ongoing trend of positive performance, the Company will be revising our three-year targets.” The company’s share price jumped almost 10% following the preliminary announcement. Expect improved guidance to propel the stock higher.
Magna International Inc. (TSX: MG)(NYSE: MGA)
The impact of tariffs. This is what the market will be most interested in when Magna reports second-quarter results on Wednesday, August 8. Analysts expect the company to post EPS of $1.73, up from $1.49 in the second quarter of 2017.
Magna has been outspoken about the negative impacts of Trump’s aluminium and steel tariffs. For the first time since the tariffs where announced, we might begin to see what kind of impact they will have on autopart companies. Leading into earnings Magna’s stock price has been trending downwards. Since mid-June, the company has lost approximately 12% of its value.
Given that analysts’ expectations are trending downward, an earnings miss may send the stock crashing.
Parex Resources Inc. (TSX: PXT)
Last week, I introduced readers to this little growth gem. It is therefore timely that Parex Resources is expected to release second-quarter earnings on Wednesday, August 8. Analysts expect the company to grow EPS to $0.43, up from $0.10 last year. This is 333% growth quarter over quarter!
The company is undervalued based on its expected growth profile. As such, if the company can prove that it can meet expectations, Parex share prices should bounce significantly. By the same token, if it posts a significant miss, then perhaps growth expectations are too high. If this happens, the stock may not be that cheap. This is a show-me stock.
