Group Think Heading Into Earnings
Last October, we took a look at the group-think in Amazon ahead of its earnings report. At the time, Wall Street was almost universally and historically optimistic on the stock, suggesting even a slight disappointment could be bad for the shares, which ended up falling more than 5% the next day.
We've been asked to create a screen looking for other stocks showing similar levels of group-think ahead of the earnings season, which begins next week. Below, we show a list of stocks that:
- Are in the Russell 3000
- Have market caps greater than $500 million
- Have more than 5 Wall Street analysts covering them
- Rank in the top or bottom 10% of all stocks in terms of average rating
The tables show the number of analysts the follow each stock, as well as the average rating. These are using the Bloomberg rating system, which goes from 1 (most pessimistic) to 5 (most optimistic). We also show the % Rank, which is where the stock's rating ranks in comparison to all other stocks in the Russell 3000, and lastly the expected earnings report date.
The stocks with the highest optimism among the largest number of analysts are Golar LNG Limited and Tahoe Resources. The average rating of nearly 5 for both, each with more than 15 analysts covering them, are the most bullish either stock has seen in at least five years. Again, that's all well and good - it just means that company management better say the right things and reveal the right numbers when they report. They are not scheduled to report until March so maybe things will change before then.
There are quite a few stocks that have low ratings and a large number of analysts. Twitter is most prominent among them, with the most analysts (40) and an average rating that ranks in the bottom 8% of all stocks in the Russell 3000.
A handful of energy equipment companies are right there with Twitter, with a lot of analysts and a lot of negative opinion. Noble, Transocean, Diamond Offshore and several others report in the next several weeks and don't have to beat very high expectations.