I consider upward revisions to be powerful indicators of earnings surprises. Unfortunately, the reverse is true as well: Downward earnings revisions are not a good sign because they oftentimes precede upsetting quarterly results.
Lately, analysts have been taking a more pessimistic stance on several S&P 500 companies — this has dragged down the consensus estimate for the index in the current quarter.
I don’t want anyone to be caught unaware. So, I’ve been running the numbers and have isolated 10 of these “slippery slope” stocks, and you can learn more about what stocks to buy and what to avoid with the help of my investing advisory.
Take a look at the 10 blue-chip stocks that investors should sell before earnings:
10 Blue-Chip Stocks on Slippery Slopes
- Amazon.com, Inc. (AMZN): In the past month, earnings estimates have plunged 74% for Amazon. Analysts now see a 64.7% drop in AMZN earnings for this quarter.
- Barrick Gold Corporation (USA) (ABX): In the past three months, estimates for ABX stock have been revised down by 37%. Analysts now forecast a 16.2% drop in sales and a 67.6% plunge in earnings for Barrick Gold this quarter.
- Apache Corporation (APA): In the past three months, the consensus estimate for APA stock has plummeted by 33%. Analysts now expect a 38.9% drop in earnings for Apache this quarter.
- BP plc (ADR) (BP): In the past 90 days, analysts have revised their estimates for BP down by 35%. The consensus now calls for a 22.2% reduction in BP earnings.
- ConocoPhillips (COP): In the past 60 days, estimates have fallen by 42%. Analysts now expect a 4.2% year-on-year drop in sales and a 40.7% decline in ConocoPhillips’ earnings for this quarter.
- Freeport-McMoRan Inc (FCX): In the past 90 days, analysts have slashed their estimates for FCX stock down by 47%. The consensus now calls for a 13.9% drop in sales and a 53.6% dive in Freeport-McMoRan’s earnings.
- Loews Corporation (L): In the past two months, estimates have fallen by 25% for L stock. Analysts now expect a 26.6% decline in Loews’ earnings for this quarter.
- Noble Energy, Inc. (NBL): In the past 90 days, the consensus estimate has plunged 43% for NBL stock. The consensus now calls for an 18% reduction in earnings for Noble Energy.
- Occidental Petroleum Corporation (OXY): In the past three months, estimates for OXY stock have been reduced by 41%. Analysts now expect a 45.3% drop in earnings for Occidental Petroleum this quarter.
- Vale SA (ADR) (VALE): In the past three months, estimates for VALE stock have been lowered by 33%. Analysts now expect a 30.9% drop in sales and a 67.7% plunge in earnings for Vale.
You can refer to my investing advisory for insight into stocks’ rankings. Using AMZN as our example, you can see that the consensus estimate has been moving around — from 69 cents per share 90 days ago to 18 cents per share recently.
With financials tools like my investing advisory, there’s no reason not to stay on top of your stocks this earnings season. Now, that Alcoa Inc (AA) has reported earnings, more and more earnings reports will be released each day. So, make sure you don’t own any blue-chip stocks to sell!
Louis Navellier has seen booms, plunges and meltdowns (and everything in between) over the last 15 years as editor of the popular investing advisory. Since launching Blue Chip Growth in 1998, he has generated returns of 345% versus the S&P’s 96%, beating the market by more than 3 to 1. Using a combination of quantitative and fundamental analysis, Mr. Navellier identifies the high-quality stocks that will give his readers market-beating returns — in all market conditions. His latest analysis has uncovered five stocks that will weather the coming market volatility and rebound strongly, handing investors who get in now double- and triple-digit returns. You can find complete details here in his latest Special Report: . Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
