Triple Plays Not Holding Gains

With earnings season now in the rearview, the pace of quarterly reports has slowed considerably. Tomorrow will actually be the busiest day of the next month with just 28 reports. Given that not many companies are reporting, we have also only seen four triple plays in the past couple of weeks since earnings season ended on May 16th. An earnings triple play is when a company beats EPS estimates, beats revenue estimates while also raising guidance; we keep track of the 100 most recent triple plays on our website for subscribers, and we publish a number of premium reports throughout the quarter focusing on these earnings winners. 

Since the end of earnings season, Medtronic (MDT), Splunk (SPLK), Hibbett Sports (HIBB), and Anaplan (PLAN) have all reported earnings triple plays. Despite some nice gaps higher on their earnings day, most gains have not been able to hold. MDT and SPLK reported last Thursday and saw two very different responses. In what was MDT’s second straight triple play, the stock rose 3.24%. SPLK on the other hand—also no stranger to triple plays with this most recent report being its 19th in its last 29 reports—fell 7.33% in response. That is somewhat unusual but not totally unheard of as the stock has risen on average 4.43% and has fallen 36.8% of the time when it reports a triple play. Since these reports though, MDT has stopped short at resistance near $93.50 at February/March highs. Meanwhile, SPLK has continued to fall, and despite a bit of a bounce yesterday is right around support at the $120 level.

Hibbett Sports (HIBB), which reported on Friday, saw a huge positive response to earnings rallying over 20%. This was the company’s second straight triple play. Given this massive run-up, the stock has come back down to Earth right around 2019 highs from before earnings. As of this writing, the stock has fallen over 4.5% further in today’s trading; filling some of its gap up. Finally, Anaplan (PLAN) reported before the opening bell yesterday and also saw a large gap higher with more buying throughout the day leading the stock to finish the day up 18.22%. Like HIBB, PLAN is down today over 6% and is filling some of this gap higher.

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