Data Explorers: A look at forthcoming US earnings
23 January 2011 London
Image: Shutterstock
Earnings dominate the financial news flow as the US reporting season gets underway in earnest. Data Explorers highlight companies announcing results this week where our long and short flow highlights interesting trends, including Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), Yahoo! (NASDAQ:NFLX ), Verizon Communications (NYSE:VZ ), AT&T (NYSE:T), Sprint Nextel (NYSE:S ), Starbucks Corp (NASDAQ:SBUX), Lockheed Martin Corp (NYSE:LMT) and United Technologies Corp (NYSE:UTX).
Last week online giants eBay and Google reported positive earnings. This week, Amazon, Yahoo! and Netflix all report earnings. Amazon has recently acquired LoveFilm which competes with Netflix in the UK market for online movie rentals. Investor sentiment towards Amazon is positive, as shorts have covered their positions, reducing short interest from its peak in September of 3.5% to 1% of total shares outstanding on loan. Netflix remains a heavily shorted stock, with short interest having increased since October from 11% to 17% of total shares outstanding on loan. This now accounts for more than 50% of the lendable supply out on loan.
Yahoo! announced that it is working with Microsoft Bing on a joint venture and is feeling the pressure ahead of its results, having already been downgraded by Morgan Stanley. Short interest has increased from 0.5% to 2.5% of total shares outstanding over the past 6 months.
Verizon Communications and AT&T, which are now both competing in the iPhone market, are due to report earnings this week with Verizon first in line on Tuesday. Short interest in Verizon is low, but has been increasing over the last quarter from 0.5% to 1.6% of total shares outstanding, despite a rally in the share price. Short sellers are less active in AT&T with the lendable supply out on loan consistently remaining under 2%. Short interest has fallen from 0.6% to 0.2% over the last quarter. Competitor Sprint Nextel is not due to report earnings until February, but short sellers have been covering their positions over the last quarter reducing short interest from 4.7% to 3.2%.
Starbucks Corp continues to innovate with the new release of its Smartphone application which enables customers to pay with one simple swipe. Short sellers continue to cover their positions in the company as the share price continues is rally dating back to last August. Short investors called this correctly, with short interest decreasing from June鈥檚 high of 3.5% of total shares outstanding to less than 1% of total shares. Holdings of funds who lend, which can be applied as a proxy for institutional ownership, have surged by 18 million over January. Investors will be anticipating the result of a court decision in March which may permit Starbucks to break ties with Kraft Foods in favour of a new distribution partner.
Lockheed Martin Corp and United Technologies Corp.鈥檚 subsidiary Sikorsky Aircraft Corp have recently received a contract to support Navy helicopters. Both S&P 500 stocks report earnings on Thursday. Lockheed Martin has seen an increase in short interest in the last quarter from 0.5% to 3%. It is important to note that the company also has a convertible bond in issue. United Technologies is a thinly traded stock in the securities lending market, with short interest at only 0.2% of total shares outstanding.
American Express and Microsoft are also due to report earnings, but are not highly traded stocks in securities lending.
Last week online giants eBay and Google reported positive earnings. This week, Amazon, Yahoo! and Netflix all report earnings. Amazon has recently acquired LoveFilm which competes with Netflix in the UK market for online movie rentals. Investor sentiment towards Amazon is positive, as shorts have covered their positions, reducing short interest from its peak in September of 3.5% to 1% of total shares outstanding on loan. Netflix remains a heavily shorted stock, with short interest having increased since October from 11% to 17% of total shares outstanding on loan. This now accounts for more than 50% of the lendable supply out on loan.
Yahoo! announced that it is working with Microsoft Bing on a joint venture and is feeling the pressure ahead of its results, having already been downgraded by Morgan Stanley. Short interest has increased from 0.5% to 2.5% of total shares outstanding over the past 6 months.
Verizon Communications and AT&T, which are now both competing in the iPhone market, are due to report earnings this week with Verizon first in line on Tuesday. Short interest in Verizon is low, but has been increasing over the last quarter from 0.5% to 1.6% of total shares outstanding, despite a rally in the share price. Short sellers are less active in AT&T with the lendable supply out on loan consistently remaining under 2%. Short interest has fallen from 0.6% to 0.2% over the last quarter. Competitor Sprint Nextel is not due to report earnings until February, but short sellers have been covering their positions over the last quarter reducing short interest from 4.7% to 3.2%.
Starbucks Corp continues to innovate with the new release of its Smartphone application which enables customers to pay with one simple swipe. Short sellers continue to cover their positions in the company as the share price continues is rally dating back to last August. Short investors called this correctly, with short interest decreasing from June鈥檚 high of 3.5% of total shares outstanding to less than 1% of total shares. Holdings of funds who lend, which can be applied as a proxy for institutional ownership, have surged by 18 million over January. Investors will be anticipating the result of a court decision in March which may permit Starbucks to break ties with Kraft Foods in favour of a new distribution partner.
Lockheed Martin Corp and United Technologies Corp.鈥檚 subsidiary Sikorsky Aircraft Corp have recently received a contract to support Navy helicopters. Both S&P 500 stocks report earnings on Thursday. Lockheed Martin has seen an increase in short interest in the last quarter from 0.5% to 3%. It is important to note that the company also has a convertible bond in issue. United Technologies is a thinly traded stock in the securities lending market, with short interest at only 0.2% of total shares outstanding.
American Express and Microsoft are also due to report earnings, but are not highly traded stocks in securities lending.
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