7 Things to Look For During Stock Market Earnings

7 Things to Look For During Stock Market Earnings


(upbeat music) – Hello everyone, Welcome to the Financial
Information Channel, my name is Marvin. In this video I’m going to explain seven things to look at during stock earnings. And one of the main reasons why investors care about
the stock earnings, because that is usually the time where the stock prices
either go up or go down. And the stock earnings, give investors an opportunity to either add shares, sell shares, or either start a new position. So, in this video, I am going to explain seven things to look at during stock earnings. And real quick before I start the video, My name is Marvin, I do
videos about the stock market, personal finance, and
how to make money online. So if you’re interested you
can click the subscribe, and the notification bell. And the first thing to watch out, is the revenue and the EPS numbers, ’cause that usually presents opportunity to either buy low and sell high. How do we know the term
that buy low and sell high is often overused. What I really care about
the company earnings is when a company presents good numbers in terms of EPS and revenue, and the stock price still goes down especially when that guidance is great. So, usually what I have been
doing throughout the years is I have been adding
stocks into my watchlist and depending on the timing that might give me an opportunity to either add positions, or get in to a new company at that specific time. So, remember that it’s
important to have that mentality to buy stock price during weakness. Now, for the second thing to
look at during stock earnings is to get familiar with the stock filings. If you’re investing into a company make sure that you read the 10-Q. That form includes the income
statement, the balance sheet, the stock holder deficit,
and the cash flow. It also has the financial conditions and the results of that specific company. So, make sure that you read the 10-Q since that document can
be a little bit long but presents really valuable information. And for the number three make sure that you read
the specific metric that is associated with that company. So, for example, if you’re
investing in Walmart, you need to pay really close
attention to comp sales. And if you’re investing in Adobe System that is a technology company, you really need to pay attention to the service revenue numbers. And with another technology
company such as Snapchat, you need to take a look
at the daily active users. So, make sure that you know exactly what you’re investing in, and pay attention to that specific metric that is associated with that company. And for the number four,
is gonna be the guidance. Now, the guidance doesn’t have to be specifically attached to numbers. For example, at this moment
we might have a trade war, so it is important to get an idea how that might affect
some of the companies associated with China. And pay attention to the
guidance during the quarter and compare that guidance
to the previous earnings to make sure that the
company is following up. The guidance has a huge effect over companies over the long term. So make sure that you pay
attention to the guidance because that can give you an idea if the management is lying to you. Now, for the number five, is going to be to measure
the cash flow of the company. Now the cash flow gives you an idea if the company has done a really good job during that specific quarter. And it can tell you a lot of good things when the company has
done a really good job managing the money, paying the debt, increasing the dividends, and, in addition, adding more
cash into the balance sheet. And, to put it in simple terms, you want to see a cash
flow that is very positive where the company is getting more money than the company is spending. Now, for the number six, is going to be the account receivables. An account receivables is
going to give you an idea if the company has been
able to create the revenue at the same rate that is creating sales. For example, if the service
or sale revenue grow to around 5% and the account receivables are only growing to around 10%, then you can get an idea of the company is not doing a really good job. As sales revenue grow
and account receivables have to grow equally at the same rate. And for the number seven, is that you just have
to enjoy the volatility. Things in the stock market
doesn’t make sense at times and it doesn’t have to
make sense all the time. So, instead of complaining and saying why the company shares move down after reporting great
earnings and great guidance, take that opportunity and
evaluate if that’s a good time to add more position into
that specific company. Investing when a company
shares are moving down can be very challenging but it can be rewarding
for those investors that take action during the bad times. And those are gonna be the seven things to look at during stock earnings. I just wanted to have this
video as simple as possible. One suggestion that I’m gonna give you is to make sure that you
back to the last earnings and read one of the 10-Qs
for your favorite stock. And I know it is boring, but at the same time it’s gonna help you to become a better
investor in the long term. And, with that said, that is gonna be
everything for this video. Please leave in the comments section below which company earnings are
you most looking forward to. And for me, it is going to be Facebook. The earnings are going
to be a few weeks away. The guidance is going
to be really important so we want to see how
the company will guide during the next few quarters. And you can look at this video where I talk about the
companies that will open up the stock earnings on Friday. And you can click here to see another video from this channel. And you can click on the subscribe to continue watching videos
about the stock market. I’m going to thank you once again for watching the video. Have an excellent day and
take care, my friends.