A lot of our research at EarningsBeats.com is driven by earnings season.
I look at every earnings report and reaction throughout earnings season and find the emerging leaders for the next quarter to consider trading. Blowout results, a big gap up, and a huge hollow candle on heavy volume is very important in my analysis. And I don't know if I've seen a better report than the one GWW delivered yesterday. Wall Street agrees. Check out the GWW chart:
Enter WW Grainger, Inc. (GWW):
There was much trepidation heading into this earnings season and results have been a mixed bag, for sure. But GWW was not mixed at all. Revenues came in at $3.80 billion, ahead of $3.76 billion consensus estimates. Earnings were reported at $7.14, again well ahead of consensus estimates at $6.97. Valuations are based on future growth expectations and if you expect Wall Street to believe your projections, it simply makes sense that you beat current consensus estimates. That's how future estimates are raised and companies command higher PE multiples. The gap higher and the continuing intraday move higher suggests to me that there's tremendous demand for GWW shares. If, over the course of the next few weeks, we see a pullback on GWW to test the gap support highlighted above, I'd be a buyer.
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Happy Trading!Tom BowleyChief Market StrategistEarningsBeats.comBetter Timing. Better Trades. |