Ahead of Earnings – ADM, DOW, MRO, MEE
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(La Jolla, CA) On Tuesday, a number of prominent names in the basic materials sector will be checking in with their quarterly results. A few of these stocks had hit new 52-week highs in recent weeks, but have since pulled back. Here is what traders can expect when these companies report amidst a state of flux.
Chemically Balanced
When the agriculture giant Archer Daniels Midland (NYSE: ADM) reports its fiscal Q2 earnings before the market open on Tuesday, analysts will be looking for the company to announce a 20.9% slide in EPS accompanied by flat sales growth when compared to its year-ago quarter. In 2009, shares of ADM rose 10.5%. So far this year the stock has fallen 4.3%.
In ADM’s Q1, EPS decreased 52% on a 29% slip in net sales. On the plus side, earnings were significantly better than the second-half of ADM’s prior fiscal year. Also, the company’s corn processing profit improved on lower net corn and manufacturing expenses. For traders looking to bet on this stock ahead of earnings, our free ADM trading report will assist you in making a final decision.
Another company in the seed business set to report its earnings on Tuesday is Dow Chemical (NYSE: DOW). Analysts are expecting Dow to swing to a Q4 profit of $0.11 per share from a loss of $0.62 per share in the prior year quarter. Sales are expected to be up 8.4% from the company’s 2008 Q4. In Q3, Dow reported adjusted EPS of $0.24, although its agricultural chemicals business faced adversity in the form of lower crop commodity prices. Traders who think that this stock may be ready to break out are advised to review our free DOW trading report prior to pulling the trigger.
More Fuel for the Fire
The consensus is that Marathon Oil (NYSE: MRO) will announce a 64.6% drop in Q4 EPS on a 7.5% decrease in revenue when compared to the year-ago quarter. Shares of MRO are presently 5.3% above where they were a year ago. The stock also carries a healthy dividend yield of 3.1%.
In Q3, Marathon saw its adjusted EPS take a dive to the tune of 77.9% from its Q3 in 2008. Revenue and other income was down 37.9% over the same time period. Production available for sale at Marathon Oil was up 5% on a year-over-year basis and the company’s refining business outperformed many of its peers. Traders looking to take a long or short position on this stock going into earnings can check out our free MRO trading report for additional guidance.
Another energy name that traders should keep an eye on when the company reports on Tuesday is Massey Energy (NYSE: MEE). The coal company is expected to post a 57.1% decrease in EPS on a 12.4% in total revenue. Shares of this stock are up 149.5% over the course of the past 52-weeks. For traders who believe that this stock still has more room to run, our free MEE trading report will serve as a valuable resource in making a final evaluation.
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