Ahead of Earnings: Advanced Micro Devices, Inc. (AMD), Chipotle Mexican Grill, Inc. (CMG), Google Inc (GOOG), Las Vegas Sands Corp. (LVS)

October 15, 2013, 11:30 am ET, BY Neal- Contributor| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

Earnings season is just getting underway, and a few very important earnings releases are coming over the next few days.  We have conducted an analysis of these companies in order to provide investors with a summarized earnings analysis (both past and present), but also, and more importantly, a price-based observation that might be better suited for investors who are anticipating price action after earnings are released.

Of course, we already know that stocks sometimes do the exact opposite of what we might expect after earnings.  A stock might fall after it beats estimates, or increase after a miss, so although an evaluation of earnings data is clearly important, a close look at the recent decisions of smart money is as well.

This combination of simple earnings data and price-based analysis can help investors not only understand earnings results, but also anticipate the stock’s move after earnings are released.

The following Companies report earnings on October 17 2013.

Advanced Micro Devices, Inc. (NYSE:AMD) is expected to post earnings on Thursday October 17 after the bell.  Analysts are expecting the company to post its first quarterly profit since Q2 of last year.  Consensus estimates are for $0.02 per share versus a loss of $0.20 per share the same quarter a year ago.  Verizon Communications Inc’s (NYSE:VZ)  decision to use AMD’s SeaMicro SM15000 to power its cloud platforms could add as much as $50 million in incremental annual revenues to AMD’s bottom line, but the stock has fallen 17% from the highs in mid-July, and recently bounced off support about a month ago.  Is this a good time to buy shares of AMD?

The stock recently tested support as that is defined in the real time trading report issued by Stock Traders Daily, and support held, but most importantly the stock has also already begun to move higher.  By definition we prefer to buy near support levels when they are tested because that allows us to maximize our return, our target is resistance and we want to get the complete oscillation from support to resistance, but it also helps us control risk, and that is the most important part.  Shares of AMD are trading above support after the test of support a month ago, and it is far enough away from support to be unattractive to us as a new buy, especially ahead of earnings.  We would avoid buying the stock at current levels, and instead watch support for a better entry level. 

Chipotle Mexican Grill, Inc. (NYSE:CMG) is scheduled to report its Q3 earnings results on Thursday October 17 after the market close.  Estimates are for the company to earn $2.77 per share for the quarter, up 22% from the same quarter a year ago.  Shares of Chipotle are up 49% YTD and trading near an all-time high.  The stock has received numerous upgrades ahead of earnings, and the stock continues to be bought on dips.  Is CMG still a buy at current levels?

Shares of Chipotle are up over 900% in the last 5 years.  Even if Chipotle is able to beat estimates on Thursday, it does not mean the stock will continue to rise, as stock price matters.  The stock is trading near all-time highs, and is close to testing long-term resistance. If the stock tests resistance, and remains below resistance, as defined in our real time trading report, Stock Traders Daily expects lower levels and a test of support.  That would make CMG a sell/short at resistance, with risk controls in place if resistance breaks higher.

Google Inc (NASDAQ:GOOG) is scheduled to report $10.33 per share when the company reports on Thursday after the market close.  Analysts are expecting a 14% increase YOY from last year’s $9.03 Q3 report.  Comparison Shopping showed 10.6% YOY growth for September, a slight increase from 7.7% August number.  Google Shopping continues to show strength in this category, and is expected to accelerate into the holiday season. Shares of Google are up about 23% YTD, however the stock has been trading sideways for the last 5 months.  Is this a good time to step in and buy shares of GOOG?

Investors need to be aware of price, and based on the Stock Traders Daily real-time trading report, the stock has been moving closer to long-term support, but isn’t there yet. If the stock continues to move lower, and tests long-term support, we would be buyers near support. If support holds, we would expect a move higher and an eventual test of resistance. We would only be buyers near support and caution investors to be patient and not to chase the stock ahead of earnings. 

Las Vegas Sands Corp. (NYSE:LVS) is expected to report $0.74 per share for the company’s third quarter of 2013 on Thursday October 17 after the bell, which would be a 61% increase in the quarter YOY.  Business in China has been driving shares of LVS higher, as casino revenue in Macau was $38 billion last year, which was more than six times that of the Las Vegas Strip.  Las Vegas Sands stock is trading near a 52-week high and up 48% YTD.  Does this stock still have room to run?

Based on the Stock Traders Daily real-time trading report, the stock has just broken above long-term resistance, which is now converted support. So far, converted support is holding, and as long as that remains true, the rules that govern our strategies tell us to expect higher levels, but converted support also acts as our risk control.  We are buyers at that converted support level, but caution buyers not to chase the stock.  We see higher levels only if converted support (former resistance) stays in place.

Navigating earnings can be tricky, sometimes investor’s earnings expectations are correct, but the stocks actually do the opposite of what they think it should have done after earnings, so our opinion based on price can help make investors make more well-rounded and sound investment decisions.

Support and Resistance Plot Chart for

Real Time Updates for Repeat Institutional Readers:

Factset: Request User/Pass

Bloomberg, Reuters, Refinitiv, Zacks, or IB users: Access Here.