Keeping abreast of global news and the latest information about the companies you invest in is essential for good trading results, as it allows you to anticipate higher volatility while taking advantage of interesting trading opportunities as may arise. When you invest in stocks, the earnings season is a time of year that often causes significant share price movements that you can benefit from, if you understand how this event affects stock prices.
What is earnings season?
Earnings season occurs 4 times a year, which corresponds to the time of year when companies publish their quarterly reports. These figures give investors an overview of a company’s past performance, as well as its expectations for future results and growth projects.
Among the most important figures for investors are net income, earnings per share (EPS), and net sales. These figures give investors and analysts an idea of how successful a given company is, or how far it has to go before it becomes successful.
To take advantage of these investment windows, investors can either buy the shares they want to own and hold, or take advantage of price volatility (both in an upward or downward price movement) with derivatives such as CFDs on stocks (Contracts for Difference) via derivative trading platforms such as Easymarkets, without holding the underlying shares.
How to properly interpret the earnings figures published by companies.
For investors and traders who invest in companies, the times when companies publish their results are important periods, through which they can get an idea of the performance of their portfolio securities and/or take advantage of new investment opportunities.
To do so, they follow the evolution of the company’s net income, which describes the income obtained by the company after all its expenses, taxes, and other relevant expenses are paid. Generally, the higher the figure, the more the company will potentially be able to return this capital to investors in the form of dividends. This also means that the company can finance its own development projects, without having to increase debt.
The second important figure for investors is the earnings per share or EPS. It is calculated by dividing the profits made by the company by the number of shares, which allows investors to determine whether a company is in good financial health and whether it has money to reinvest. This ratio is also important when comparing a company’s performance against other companies in the same industry, in order to determine which one offers the best profitability.
How not to miss a single corporate earning publication
There are many reputable websites that allow you to view upcoming corporate publications at a glance. With such a calendar, you will be sure not to miss the publication of the results of a company you have in your portfolio, or in which you are considering investing. Some of the best-known calendars include Nasdaq, Yahoo! Finance, and Bloomberg. In addition, these companies also offer comprehensive financial analysis that can help you with your investments.