EarningsBeats.com Digest for August 9

Dear EarningsBeats Community Member.

As a reminder, On Monday, August 12, Tom Bowley, Senior Technical Analyst, StockCharts.com, will be joining me in a webinar where he will be discussing the methodology behind selecting his Top 10 Stock Picks for his Model, Aggressive and Income portfolios.. Then the following Monday, August 19, Tom will be unveiling this top 10 picks for the three portfolios, 30 stocks in all. These events are exclusively for EarningsBeats community members like you. There is no need for you to register for the webinar and you will be sent room instructions prior to the 4:30 pm eastern start. Also, both webinars will be recorded for those of you unable to attend the live event. More below.

At your service,

John Hopkins
EarningsBeats.com

Model Portfolio Surges To Its Highest Level; Leaves S&P 500 In The Dust

Thursday was a huge day for my Model Portfolio and it widened the gap between its performance and that of the benchmark S&P 500. One question that has come up over and over again about my strategy with these portfolios (the Aggressive and Income portfolios are my other two) is this - Why have you decided to hold into earnings? Well, the primary reason I've changed my mind is that these portfolios hold 10 stocks into earnings, not just one or two. So the risks are somewhat offset, figuring that some will move higher and some will move lower. Also, you have to keep in mind that Wall Street is accumulating these stocks because they've visited these companies' management teams and they like what they've heard. Therefore, the expectation is that these companies will deliver solid quarterly results. While it's not a certainty that every company will, odds are that the majority will report great results. But the reaction to earnings reports is the tricky part. All 10 Model Portfolio stocks have now reported their quarterly earnings and the next day reactions have been as follows:

ROKU: +20.86%
MELI: +12.15%
SHOP: +7.40%
LHX: +3.80%
CMG: +3.74%
MSCI: -2.29%
GPN: -2.39%
WCN: -2.62%
GDI: -5.34%
AMD: -10.10%

Of these 10 stocks, 7 posted revenues and EPS that beat Wall Street consensus estimates. 2 matched EPS expectations (AMD and WCN) and 1 missed revenue expectations (GDI). Every other stock beat top and bottom line estimates. That's how you outperform and it happens because we do our homework. Did these stocks soar after earnings? Well, ROKU and MELI did, but 5 were higher, 5 were lower in their stock price reactions the day after earnings. We're not getting lucky, we're simply benefiting from companies with strong fundamentals and strong technicals. It's a relative strength strategy that is working. Here's the performance of the Model Portfolio since its inception on November 19, 2018:

Model Portfolio: +48.96%

S&P 500: +9.19%

That's for the past nine months. There is no crazy trading intraday. You buy 10 stocks equally-weighted and you hold them for 3 months. Then you sell them and add the next 10 equal-weighted stocks based on the same strategy and hold for 3 more months.

On May 19, 2019, I was encouraged to start an Aggressive Portfolio and Income Portfolio, which I did. Here are the 3 portfolios vs. the S&P 500 since that date:

Aggressive Portfolio: +19.85%
Model Portfolio: +14.47%
Income Portfolio: +7.03%

S&P 500: +2.75%

These portfolios are crushing the S&P 500 and it's not even close. I will be joining John Hopkins of EarningsBeats.com for a webinar on Monday, August 12th to discuss these portfolios, their strategies, results, and much much more. You don't need to register. It's a FREE event and the entire EarningsBeats.com community is invited. It's a simple "thanks for your support" webinar and one that I think you'll really enjoy!

I hope to see you there!

Tom Bowley
Sr. Technical Analyst
StockCharts.com