Big Week But Bad Day For Triple Plays

Even though earnings season unofficially came to a close on Tuesday with Wal-Mart’s (WMT) report and despite a shortened week due to President’s Day on Monday, this week saw the highest number of Earnings Triple Plays of any week so far in 2020. A stock reports a Triple Play when it beats EPS and revenue estimates and also raises guidance. Today alone there were five: Bandwidth (BAND), Diamondrock Hospitality (DRH), eHealth (EHTH), Gaming and Leisure Properties (GLPI), and Globant (GLOB).

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Given the strong fundamental results, triple plays typically experience strong stock price reactions to earnings. On average, Triple Plays this year have gapped up 5.57% but have sold off from open to close, falling just over 1% for a full day gain of 4.43%. That compares to a full day loss of 6 bps for all stocks that have reported earnings this year. Of today’s Triple Plays, performance has been worse though only having risen 3.1% on average. But that was not the case for the entire session. The gaps up at the open were actually much stronger than normal with an average gap up of 9.9%, but broader market weakness has led these names to sell off intraday. The worst of these was Bandwidth (BAND) which is down over 11% from the open. EHTH and DRH were also notable decliners having fallen 9.13% and 5.18% since the open, respectively. 

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