Q: It is common for readers to ask what market expectations are for companies that you are aware of a few days before they report their earnings i.e. recently CSU, KXS and GSY. When you see stocks with bad market expectations, could you put an alert out that for example XYZ is going to have bad market expectations? In other words, give us the head's up on bad market expectations of a security before it reports earnings. I assume that NVEI would have bad market expectations before they reported. Thank you
5i Research Answer:
Sorry, we do not have such predictive ability. The fact that NVEI declined so much confirms that the news was a 'surprise' to investors. It it was expected, it would not have fallen so much on the news. EPS missed estimates by 12%, but guidance was worse. In the past 10 quarters, NVEI has beaten expectations 8 times, so its track record has been generally pretty good. This was the largest drop it has ever had on earnings. For the Q4 2019 period, it rose 31% on earnings, on a positive surprise.