E Top Earnings Trades For 2017?


Rowan (RDC) gets a special mention as our biggest single positive move. The company reported earnings in late February that topped the whisper number. Our analysis expected a positive price move of +6% in fifteen trading days...what we got was a +29% move in that same period. A few others came close (PNC Financial +24%, Hovnanian +22%, Time Warner +22%) but Rowan takes the top spot for single biggest positive move on an earnings trade.


We need to provide some additional insight with our losers data. We place a 6% stop loss on all positions, so any losses are (obviously) capped at 6%. This category provides data based on actual price movement ignoring the stop loss.


Macy's (M) earns the top spot in our losers list as the company beat the whisper number in three quarters...and that meant three long position trades...but the stock moved against us in all three trades. The average trade loss comes in at 8%. Macy's tops our list in 2016 of worst and most inconsistent earnings trade.


Lowe's (LOW) comes in at a close second, but with short position losers. Lowe's reported earnings in three quarters that were short of the whisper number, and our data indicated taking three short positions. The stock, however, moved higher on all three trades, and saw an average trade loss of 6%.

JC Penney

JC Penney (JCP) comes in third place with a record of one win and three losses. The company reported inconsistent earnings in 2016, beating the whisper number twice and missing twice. The one winning quarter (long position) saw a return of 10%, but the three losing quarters (two short positions, one long) saw average losses of 7%.


We weren't sure whether or not to include Cigna (CI), but with a record of no wins and two (big) losses we felt it deserved a fourth place position. One long position in May yielded a 6% loss, and one short position in November yielded a 15% loss. Chevron and Agilent Tech were contenders (each with records of one win, three losses), but Cigna rounds out our losers with a shut out.

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