Research Blog

The Short List, May 17 - Retailers start to report for Q1 this week and more shareholder meetings go in-person

 

While the Q1 earnings season starts to cool down this week, we will get a read on US consumer health as retailers start to report. All together we’re expecting results from 724 worldwide companies, with 510 of those located in North America.

Below are some names we will be focusing on, with Thursday being the busiest day of the week.




Earnings Date Outliers

As always we’re keeping a close look at earnings date outliers, companies that are reporting earnings on a date outside of their historical range, which could be a clue as to what the upcoming report and call will reveal. 

We already reported on Hostess Brands (TWNK) in our Short List video out before the bell (you can view it above). Since IPOing in 2017, they have always reported Q1 results on May 8 or 9. On April 28 they issued a press release stating that Q1 2021 results would be released on May 17 BMO, with the conference call at 8:30am. This change resulted in a high Z-score of 7.35, and reflects a later than usual confirmed earnings date. While TWNK slightly beat revenue expectations, and met EPS estimates, net income fell to $26.7M from $81.74M in the year-ago period. The stock was down around 2% at the time this was written, which falls in-line with our expected logic.

Other outliers to pay attention to after the bell:

Park City Group (PCYG)

Company Confirmed Report Date: Monday, May 17, AMC
Projected Report Date (based on historical data): May 10, AMC
Z-Score: 4.49
DateBreaks Factor: -3

This is not the first time Park City Group has pushed their earnings date back, they did so last quarter. The micro cap SaaS company delayed fiscal Q2 results from Feb 8 to Feb 16, in the 10 days after the report the stock proceeded to fall 20%, and has continued to fall since that time, now down around 30% from the last earnings report. For their fiscal Q3 they typically report between May 9 - 11. As such, we set a report date of May 10. On May 10 they issued a press release stating that Q3 2021 results would be released on May 17 AMC, with the conference call at 4:15PM EST. This change resulted in a high Z-score of 4.49. A high positive Z-score (we consider anything higher than 3 or lower than -3 to be significant) reflects a later than usual confirmed earnings date, which in this case could signal that PCYG is getting ready to surprise to the downside. Z-score is also incorporated into our DateBreaks Factor*, for which PCYG has a factor of -3, meaning there is a high negative deviation from the historical trend for the same quarter.

Luna Innovations (LUNA)

Company Confirmed Report Date: Monday, May 17, AMC
Projected Report Date (based on historical data): May 6, AMC
Z-Score: 4.69
DateBreaks Factor: -3

This small cap developer and manufacturer of fiber-optics products for the aerospace, automotive, energy, defense and various other industries, tends to report Q1 earnings between May 6 - 11 and has been doing so since 2010. As such, we set a report date of May 6. On April 26 they issued a press release stating that Q1 2021 results would be released on May 17 AMC, with the conference call at 5PM EST. This change resulted in a high Z-score of 4.69. A high positive Z-score (we consider anything higher than 3 or lower than -3 to be significant) reflects a later than usual confirmed earnings date, which in this case could signal that LUNA is getting ready to surprise to the downside. Z-score is also incorporated into our DateBreaks Factor*, for which LUNA has a factor of -3, meaning there is a high negative deviation from the historical trend for the same quarter.

Clearside Biomedical (CLSD)

Company Confirmed Report Date: Monday, May 17, AMC
Projected Report Date (based on historical data): May 7, AMC
Z-Score: 8.62
DateBreaks Factor: -3

Clearside Biomedical is a microcap biotech name, with a market cap of just around $150M. They develop and deliver treatments that restore and preserve vision for people with serious back-of-the-eye diseases. The firm has a proprietary technology that is a non-surgical alternative to restore vision health. The company has a history of reporting Q1 results between May 8 and May 10, with no day of the week trend. On May 4, CLSD issued a morning press release stating Q1 results would be released on May 17 AMC. This change resulted in a high Z-score of 8.62. The stock is down nearly 30% YTD.

In addition to earnings, once again we’ll  continue to see several shareholder meetings held this week. It’s the third busiest week for annual meetings, with last week being the busiest. This week 588 companies will hold their meetings, 69 of those from the S&P 500. As you can see in the graphic below, we’re starting to see more in-person meetings as the weeks go by. Last week only 8% of S&P companies with shareholder meetings had them in person, this week we’re up to 17%. The 12 companies going in person this week are: Alexandria Real Estate Equities, NOV Inc, Amphenol Corp, Align Technology, Fidelity, Chubb Limited, Kansas City Southern, L Brands, Mohawk Industries, Norwegian Cruises, NextEra Energy & People’s United Financial Inc. 

You can also see (below) just like earnings this week, the concentration of shareholder meetings will be within the Consumer Discretionary sector, followed by Financials and then Real Estate and Health Care.



Next week the earnings season continues to taper off, with 452 companies reporting worldwide, and 246 in North America. There will also be 310 shareholder meetings.