For a stock trader quarterly report is a vital cog in the wheel for assuming financial health of a stock. A lot of information can be obtained from these reports in the form of sales, the earnings date aapl etc. But which is the area of the report that would provide vital insights to an investor. Getting into the details some financial experts were asked on what are their take away from the quarterly report of a company and the answers were as follows
For sure you need to get to the cyclic nature of a business first and foremost. There could be some volatile points which you can avoid. A glance at a single quarterly report is not going to provide you with a lot of idea. But on careful observation of quarterly report on a consistent basis this can give you an idea about the true sense of volatility expected. It does become easy to transact once you figure out the patterns and the reasons that emerge out of it.
The earnings per share tend to be adjusted
You are going to adjust the earnings per share that would help to remove the accounting items. This provides vital cues on how a stock is performing over a period of time and even confers to the EPS trends. Whether it misses or aligns with the prediction of an analyst. This is going to have a substantial impact on the short time share prices. Valuable insights are also provided on whether a company is able to align with the expectations of of the NSE or Wall Street for example.
Perhaps the most important point of consideration in a quarterly report is the sales figures. Do not stick to one single quarter. Instead compare the data over several quarters. If a company is able to maintain its sales figures on a consistent basis then for sure they are expected to do a good job.
Earnings growth at a consistent level would provide a clear indication whether the company is a profitable one or not. The reason is it is the money that a company goes on to make. This is often measured in terms of EPS or earnings per share. This appears to be one of the vital aspects of the financial health of a company. In a way it depicts a situation that the company is on the right track to provide solid return for the investors.
As an investor you should focus on the metric comparison in the previous quarter or so. The term missing or beating analysts are often subject to discussion the impact in case of share prices tends to be short lived. Just you can go on to compare EPS of a company in the current term with what was reported in the last period. EPS, net income and growth of revenue charts are a precise indicator associated with long term performance.
Strategic plan of the company
The quarterly reports are embedded with what did happen in the last quarter, but investors do not pay a lot of attention to what did happen in the last quarter. It is pretty much easy to figure out on how the company executed their plans in their last quarter. This might give you a new sense of confidence in choosing them.
Earnings conference call
Though news reports and other sources might turn out to be a valuable source of information, but nothing stands in comparison to the earnings conference call of the company. Before we proceed ahead one needs to understand more about conference call in details.
During the course of the call investors or financial experts can hear the management of the company. They are going to depict the quarterly results of the last quarter. Most of the public limited companies go on to hold 4 calls during the year which is basically at the end of each quarter. These calls also go by the name of analyst’s calls or even earning calls.
In the days gone by calls were made to institutional experts or wall street professionals. But thanks to the evolution of the internet even common people can be part of such calls.