RE:Thoughts on EarningsStarsearcher;
I would generally agree with you that if you are a trader, it is most lkely not good for you to be in a stock when the earnings are released. Especially in the case of a company like Canopy which has historically tended to miss on their numbers, as evident by the absolute piss poor financials which they reported in their last quarter.
On the other hand, they could come up with a pleasant surprise which is what happened last quarter when they made the Constellation announcement right at the same time they were releasing their horrid financials. If not for the Constellation announcement, my bet is that the entire weed sector would have fallen right into the abyss since they were already at summer time lows at that point.
Clearly evident by the fact that Canopy was trading in the low $30's, Aurora in the low $5's, Aphria under $8, etc. on the day before (i.e. August 14th) the release of Canopy's financials. The Constellation announcement on the 15th managed to bury the Canopy miss on their financials as we saw an immediate jump start in the entire weed sector of 20% to 30%+ across the board the same day. This actually signalled the start of a 2-month climb out of the abyss for most weed stocks and propelled them to reach new all time highs just prior to legalization date.
So, anybody that was out during the release of Canopy's earnings on the last go roto mid-October. Almost makes me wonder if Canopy has something else up their sleeve just in case their financials look terrible again, although their spin on future growth going forward might hopefully be good enough to keep the sellers at bay.
Hmmm...............................
starsearcher40 wrote: Generally speaking, I try not to be in a given stock around earnings. In cases where there is anticipation built into the stock, and in Canopy there certainly is, it can be a bit of a dangerous thing, at least in the short term.
Here's why.
1) If they BEAT earnings, then there can be upside. But the question is, is there really anything that can provide an upside surprise for Canopy? I'm not convinced there is as the quantities seem fairly well known and understood. If there's a LOT of anticipation built in, then even on upside surprises, there can be occasions where the stock doesn't pop, or even moves down...sell on news. Those incidences are both frustrating and confusing for many.
2) If they MEET earnings, the stock drops, because anticipation buying wanted more.
3) If they DISAPPOINT on earnings, the stock drops a lot.
So in layman's terms, there is a 2/3rds chance of a drop on earnings (or more), and slim chance that anticipation buying will be rewarded. For myself, playing the short term, the risk/reward ratio doesn't warrant being in. Having said that, do keep in mind that these comments are irrelevant for anyone who is in the stock for the long term. All of these phenomena noted above are short-lived, and only affect the general trajectory of the stock for a few days to a week at most. They are playable, absolutely, if that's your thing.
All in, be excited that Canopy is a great company doing the right things. Short term though, caution I think is prudent.