Investors Eye Whisper Numbers for Returns; A Look at Exxon Mobil, Chevron, Disney

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Investors are expecting strong earnings reports from Exxon Mobil, Chevron, and Disney. If expectations are exceeded look for the stocks to be rewarded, but miss and look out below.

The investors that follow and invest in Exxon Mobil (XOM), Chevron (CVX), and Disney (DIS) will determine their market direction. Some have more influence than others, but collectively, their expectations of stock price, stock direction, revenue, sales, etc. define the market. If investor expectations (real or perceived) of a company's future were bleak, the company stock price may suffer. If investor expectations (real or perceived) of a company's future were strong, the company stock price may surge.

It is the same with corporate earnings. When a company reports earnings that exceed investor expectations, the stock is rewarded. When a company reports earnings that fall short of investor expectations, the stock is punished. Each earnings report release presents a potential for stock price volatility. The simple fact is that expectations create surprises, surprises create volatility, and volatility creates opportunity.

Expectations, however, are much different than estimates. Estimates are collected from analysts, and estimates simply do not have the same influence on stock prices as expectations. Many traders are under the perception that WhisperNumber.com collects data from analysts. This could not be further from the truth. Since our inception in 1998 we have polled, surveyed, and collected data from registered individual investors of our website. The collective expectations from individual investors have proven to be a more accurate and significant predictor of stock movement following earnings announcements for ten years running. This declaration is supported by not one but two independent studies and are published in the Financial Decisions journal.

Let's now look at the opportunity of earnings volatility for Exxon, Chevron, and Disney. WhisperNumber.com tracks and analyzes post earnings price movement (basically what happens to the stock on a short term basis when they beat or miss the whisper number expectation). Obviously knowing which companies are most likely to react to beating or missing the whisper number has value. Having a target timeline, target price move, and advanced knowledge of this data adds more value.

Exxon Mobil (XOM) is expected to report earnings on Thursday, July 30th, before market open. The whisper number is $1.04 which is two cents ahead of the analysts estimate. Exxon has topped the whisper number in seventeen quarters, and missed in twelve quarters. Their average price move is +4.9% in thirty trading days following a report that exceeds the whisper, and -4.5% when they miss.

Chevron (CVX) is expected to report earnings on Friday, July 31st, before market open. The whisper number is $1.11 which is sixteen cents ahead of the analysts estimate. Chevron has topped the whisper number in six quarters, met in one, and missed in eight quarters. Their average price move is +4.5% in thirty trading days following a report that exceeds the whisper, and -5.8% when they miss.

Disney (DIS) is expected to report earnings on Thursday, July 30th, after market close. The whisper number is $0.55 which is five cents ahead of the analysts estimate. Disney has topped the whisper number in nineteen quarters, met in four, and missed in nine quarters. Their average price move is +8.1% in thirty trading days following a report that exceeds the whisper, and -9.0% when they miss.

So while Exxon and Chevron may receive more media attention, the smart investor will be watching Disney as it presents better price volatility, and a better trading opportunity following earnings. You could spend years collecting and analyzing your own data, and coming up with an analysis of best companies. WhisperNumber.com has completed the analysis for you.

Investors will be looking to take advantage of the price volatility associated with earnings reports both before and after earnings are released. WhisperNumber.com has provided the following data for review:

  • Praxair (PX), 7/29, whisper number is $0.97, two cents less than analysts estimates
  • Lincoln National (LNC) 7/29, whisper number is $0.82, one cent less than analysts estimates
  • Sprint Nextel (S), 7/29, whisper number is a loss of $0.05, three cents less than analysts estimates
  • Cadence Designs (CDNS), 7/29, whisper number is a loss of $0.06, two cents ahead of the analysts estimates
  • Medco Health (MHS), 7/29, whisper number is $0.65, in line with the analysts estimates
  • Wellpoint Health (WLP), 7/29, whisper number is $1.48, five cents ahead of the analysts estimates
  • Flextronics (FLEX), 7/29, whisper number is $0.07, one cent ahead of the analysts estimates
  • Dow Chemical (DOW), 7/30, whisper number is a loss of $0.05, three cents ahead of the analysts estimates
  • Becton Dickinson (BDX), 7/30, whisper number is $1.24, in line with the analysts estimates
  • Mastercard (MA), 7/30, whisper number is $2.54, twelve cents ahead of the analysts estimates

About WhisperNumber.com:
WhisperNumber.com is an independent financial research firm that collects sentiment and market expectations from the investment public. The 'whisper number' found on WhisperNumber.com is derived from an average of individual investors' expectations regarding earnings for the most recent quarter. The whisper number is available to the general public and is considered an alternative to analyst estimates (or consensus numbers) for quarterly earnings. The company also publishes market sentiment data on US & Global Stock Markets, bonds, sectors, and ETF's.

While WhisperNumber.com is open to the public with registration, they also provide a unique earnings trading tool called 'Whisper Reactors'. Whisper Reactors are those companies most likely to see price volatility according to whether or not they beat or miss the whisper number. These companies have a high probability of positive price movement following the earnings report if they beat the whisper number, and negative price movement if they miss the whisper number.

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JOHN SCHERR
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