While earnings season always brings surprises, and I often get hit with negative surprises, I also think it can be a great time to generate alpha in one’s portfolio.  I place a heavy emphasis on business trends, supported by balance sheet strength, as well as earnings and cash flow generation.  I have many holdings that I view as being significantly undervalued with an expectation that an upcoming earnings release will be the catalyst to unlock the company’s potential value.  I’ve decided to outline 10 earnings trades over the next two weeks that I intend to play.  To keep it interesting, I am going to invest an equal dollar amount in each trade (1/2 positions on the days there are two earnings reports).

Here are my scheduled trades for the next two weeks.

2/6/12 Buy VSH

2/7/12 Sell VSH

2/8/12 Buy 1/2 RDA

2/8/12 Buy 1/2 IM

2/9/12 Sell RDA

2/9/12 Sell IM

2/9/12 Buy BRKS

2/10/12 Sell BRKS

2/10/12 Buy ORBK

2/13/12 Sell ORBK

2/13/12 Buy UCTT

2/14/12 Sell UCTT

2/14/12 Buy 1/2 IOSP

2/14/12 Buy 1/2 NVMI

2/15/12 Sell IOSP

2/15/12 Sell NVMI

2/15/12 Buy HDNG

2/16/12 Sell HDNG

2/16/12 Buy DTLK

2/17/12 Sell DTLK

 

I’ll report my trades in the comments section and will provide a summary of this exercise after the two weeks is over.

 

4 Responses to “Goin’ rogue with 2 weeks of earnings plays”

1. 

   fastprophet4u

   February 6, 2012 at 1:16 pm

   Bought VSH at 12.80
2. 

   fastprophet4u

   February 7, 2012 at 2:21 pm

   A rocky start to this exercise. Sold the VSH at 11.69, and bought half positions in IM at 19.65 and RDA at 13.45. Still holding a core position in VSH, but it will be a second half of 2012 story at this point.
3. 

   fastprophet4u

   February 10, 2012 at 1:54 pm

   Some ill-timed, next day sales have not helped my returns on this endeavor. Sold RDA at 13.35, IM at 19.35. Bought BRKS at 11.29 and sold it this morning at 12.12. Bought ORBK for Monday’s earnings at 11.01. Down a tiny fraction at this point, hoping for better results next week.
4. 

   fastprophet4u

   February 15, 2012 at 2:05 pm

   Sold ORBK for a wash at 11.00. Was out of pocket on Monday and missed buying UCTT ahead of its 13% gain on Tuesday (Grr!). Bought 1/2 IOSP at 30.04 and sold it for 30.95. Bought 1/2 NVMI at 8.58 and sold it for 9.03. Bought 1/2 position in DTLK at 10.40 because earnings were moved to an earlier time tomorrow. Bought 1/2 position in HDNG at 10.67.

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