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Thomson Reuters Senior Research Analyst Sri Raman on the stocks to watch this earnings season.
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Earnings season kicks off tomorrow -- -- set to report earnings off to the -- we get -- -- next season underway but our next guest is taking out his crystal -- -- -- has long been an advocate and giving -- three names that could beat -- three that could.
Miss estimates -- is the senior research analyst at Thomson Reuters and I got have to give you some credibility here in the last earnings season.
You correctly predicted the directional surprise of 80% of the company's.
That were analyzed so tree we are looking TO we -- do you have that crystal log -- -- -- that -- football games have really tonight.
And what's the -- do you have what where do you see things going because the market started look like they're saying you may not be.
So great.
Sure and god that's not surprising.
Earnings estimates that -- treats for the S&P 500 are two point 8% for quarter -- year over year.
-- a -- not a fantastic -- keep in mind just in October that number was.
Our kids are due -- 10%.
So -- with estimates have been brought down quite a bit and -- -- off the last three months.
I know of seem a little bit that on that on no because consumer have been a little bit of that on the Chris -- fiscal cliff.
But got things aren't looking so create but.
Since those estimates are soon -- now a look for some companies to overhaul -- -- -- tend to be done by enough to actually meet this quarter have good that's the question area and it's on so let's -- even begin with the sectors which ones do you think people really outperform.
So that the sectors we see right now with the highest growth creates our consumer discretionary and financials.
Consumer discretion is expected to grew at about -- -- expected to grow at about 11% this quarter up that's pretty hello the but once again keep in mind in October those numbers were -- -- 17% so those estimates have come down quite a bit since October.
So eleven -- well and is hello -- but not as heavy as it was just three months ago.
So that your that being said it Wells Fargo reports on Friday and their stock actually take act took a hit today so expectations may have gotten too high.
On the flip side who do you think which sectors you people.
Under her farm.
So one of the sect is set to underperform as the industrials taught there -- -- is expected to be a negative five point 6% for this quarter.
So that's -- a big sign up.
Part of that has to do with the global economy as you see in Europe you've seen issues -- and FedEx actually -- -- there it's that would on in Europe and several issues there.
-- are some problems going forward so in FedEx actually reported just a few days ago and as a precursor to the industrials and the S&P 500 so.
Look for more weakness on the industrials that's -- stop reporting in the coming weeks.
But let's get to the nitty gritty and talk about individual names of -- -- would those three.
Stocks that you think -- beat the street.
Sure so that as as -- -- -- -- always going to be winners and losers and even in this economy it is it's always possible to pick winners so one of them is saw.
Honey if you holly Frontier Corps itself.
And refining company -- did taking advantage off and the disparity between WTI and Brent.
Do you buy the oil at the discounted WTI which is that a 20% discount.
And then their fight and so -- act to do -- Brent price this so that's that's something that's not pulling their profits higher minus a particular look at that.
-- couldn't stop -- Smart estimate which actually takes a look at the most decent estimates and the best analysts and puts more we don't have.
Is actually higher than the consensus by almost any sense the consensus that to a seven it's up to 26 is what this dominant Smart estimate -- Depicting that tells us that these estimates have been -- can hire or the company's gonna -- when it reports earnings and a few weeks Tracy.
How -- -- here as it be you've also got DirecTV and Smithfield Foods that don't third that's correct me as odd considering we're tracking how high.
-- -- -- -- -- -- -- -- That's it's a one of the surprising expect not terribly surprising given it's a holiday season who doesn't like to eat during the holiday season Santa.
But -- that yeah.
That being said yes corn prices that it ought to problem for -- Smithfield.
But one of the things that is going and a fever is got a lot of growth and laws and hogs and hog farmers.
So that's causing the supply of -- to be decreased tremendously to Smithfield has a pricing evocative look -- it did not -- crisis with.
The green prices that that the peak defeat -- aug -- That's causing them to get slightly better profits it's causing -- -- be slightly more optimistic.
Up pressures in Europe supplies of almost windows in Europe -- Smithfield as a huge -- markets and that.
That continent so you put pricing to be the driver of earnings here and Smith hosting for the fantastic job with.
Great job keeping up -- the neatest regulations and and the -- and that cutting back 2007 to compete constituent today -- do what.
The government mandates -- that's great for them.
Well that's on the upside tree which is great but -- we're gonna talk about the three the -- I have -- on you have Spirit Airlines any of this.
And AMD advanced micro devices Spirit Airlines they have high fees as a matter how how -- -- anyway.
It does help them but it may not help them a -- given a weak economy if a traveler goes in for the cheap ticket and then suddenly hit with a lot of fees.
That cabinet isn't going to be terribly happy.
So as consumers pull back on their wallets look for them to try and stop spending less on -- -- fees that they might mean -- on that.
But even more devastating for them with higher -- Sunday.
Spirit Airlines operates about 200 flights today part can sandy suspended about hundred integrity of their flights and that's a large percentage of flights that with that would canceled that's gonna hit an interest -- And secondly.
This -- that was devastated not gonna see leisure travelers go to those areas and that's the problem Spirit Airlines is dependent on leisure travelers and that obviously want to go to the future devastated by.
Are you so you're also real quick you have a you have that -- -- copper company -- -- there and because of the storm because of hurricane sandy so many people.
We're without cars -- had direct cars -- still think that they didn't do while.
Yes they still expected to miss -- lots portion of that has to do it there weakness in Europe.
They just want -- European operations in 2011.
And the weakness that they have no pricing power in Europe.
That's what's causing the missing in Nevis the smartest and it is one cent below the consensus.
They actually king.
Two thirds of their operating income for off in interest expense -- -- so did they have -- have a large debt -- that they're paying off right now.
Think he's -- this zipper club that's that's pretty big straight -- I don't -- -- getting -- we have to leave it there but I I I got to ask him an -- sports forecasting your -- twice as used to good effect that -- stock forecasting that is so what do you think who's gonna win the game tonight Alabama are Notre -- I'm not sure without Obama looks like the juggernaut so I wouldn't be surprised I wanted to hey -- -- diplomatic.
Ten million common thank you very much all the people think -- sentiment but that Clinton -- concedes that he --
