As earnings season kicks off in earnest this week, using data from our Earnings Explorer tool, we set out to find the stocks that are on the biggest earnings winning and losing streaks when it comes to share price performance.

There are 21 stocks reporting between now and the end of earnings season that have seen gains on their earnings reaction days for the last six consecutive quarters or more.  (For a stock that reports after the close, its earnings reaction day is the next trading day.  For a stock that reports before the open, its earnings reaction day is that trading day.)  Five of the 21 stocks have gained on each of their last nine earnings reports!  One of these is SiteOne Landscape (SITE).  Below is a snapshot of SITE’s earnings reports going back to early 2019 pulled from our Earnings Explorer.  Heading into its last report on August 4th, SITE had gained on each of its last 8 earnings reaction days, and it went on to gain another 7.65% that day as well!

Below is a table listing the 21 stocks that are currently on earnings winning streaks of six quarters or more.  Along with SITE, the other stocks that have seen gains on their last nine earnings reaction days include Lindsay Corp (LNN), ExlService (EXLS), LKQ, and Cheniere Energy (LNG).  For owners of these stocks, quarterly earnings have been a breeze over the last 2+ years.

On the downside, there are 16 stocks that have fallen on their earnings reaction days for seven or more straight quarters.  These are stocks that just can’t catch a break lately when it comes to earnings.  As shown, Hawaiian Holdings (HA), Verisk Analytics (VRSK), and BrightView Holdings (BV) have fallen on each of their last 11 quarterly earnings reaction days!

One of the absolute worst performing stocks in response to earnings has been The RealReal (REAL).  The luxury consignment website went public back in June 2019, and so far the stock has yet to see a price gain on any of its nine earnings reaction days!  Talk about a painful streak for shareholders.  Below is a snapshot of REAL’s historical earnings reports pulled from our Earnings Explorer.  As shown, not only has REAL fallen on each of its nine earnings reaction days since going public, but it has also fallen more than 10% on each of its last four earnings reports.  You can use our Earnings Explorer to monitor historical earnings trends for the names you care about most.  Start a two-week trial to Bespoke Institutional to access our Earnings Explorer now.

Since the S&P 500’s last high on September 2nd, despite an average opening gap of around 5 basis points (bps), the index has averaged a 17.7 bps decline from open to close.  Looking at the intraday pattern in that time, the morning through the early afternoon typically sees the index erase any gains from the open. After a small bounce in the mid-afternoon, the final hour has averaged a sharp reversal lower.

Taking another look at intraday patterns, below we show the cumulative performance in 2021 of $100 through a few hypothetical strategies. The first is buying at the close and selling one hour into the following session (dark blue line).  The next would be buying at the start of the final hour and selling at the close (red line). The third would be holding for the time between 10:00 AM to 3:00 PM (gray line).  The last would be a simple buy and hold from close to close (green line).  As shown, “smart money” is not looking particularly bullish this year.  Had you only owned the S&P in the last hour of the day, your $100 at the start of the year would be down to just over $88.  Meanwhile, owning the opening gap into the first hour only would leave an investor up almost $16.  While you would be holding on for a longer period of time, owning in the middle of the day would have resulted in decent gains, but the best strategy has been to buy and hold. which captures returns both throughout the trading day and outside of regular trading hours.

Not shown in the chart below is if the trading day ended at 3PM instead of 4.  If the equity market simply closed at 3 PM every day (or you sold at 3 PM and bought again at the close), that strategy would be up roughly 30% YTD!  A three o’clock closing bell on the east coast has a nice ring to it!  Click here to view Bespoke’s premium membership options.

Looking at sector performance over the past week, the weakest sector has been Communication Services (XLC) with a decline of over 2% in the five days ending yesterday. That brings the sector over two standard deviations below its 50-DMA. Health Care (XLV) is the only other sector at extreme oversold levels although its recent decline has been much more modest.

Whereas most of the past year has seen XLC consistently hold above support at its 50-DMA, since the start of September, the sector has trended lower, and over the past month, it has also been below its 50-DMA.  Now smack dab between its 50 and 200-DMAs, yesterday’s decline resulted in XLC falling below support around $79. That level formerly marked short-term highs in April and May of this year and a low/test of the 50-DMA in mid-July.

While that breach of support has not necessarily been dramatic, the same cannot be said for many of the sector’s stocks.  For example, telecoms have gotten crushed as AT&T (T), T-Mobile (TMUS), and Verizon (VZ) have all collapsed in recent days with each one extremely oversold.  Of these, only TMUS has appeared to have found any hint of support at recent lows. The other stock in this industry, Lumen Tech (LUMN), has also been moving lower but has not collapsed like the others.

As for other members of the sector outside of that industry, names like Charter (CHTR), Comcast (CMCSA), Facebook (FB), and Alphabet (GOOG) have also pulled back sharply recently breaking longer-term uptrends. Also, since many of these stocks have very large market caps, their impact on the sector’s performance is greater.  On the bright side, CHTR and FB have appeared to have found some support at their 200-DMAs while the opposite is the case for CMCSA. Similarly, GOOG just recently failed to move back above its 50-DMA.  As for the video game stocks, Take-Two Interactive (TTWO) also failed to move back above a moving average recently while Activision Blizzard (ATVI) has been in a steep downtrend over the past few months with a failed attempt to break out of that trend in the past several days.Click here to view Bespoke’s premium membership options.