Rotation Springs Eternal: An Earnings and Sentiment Data Vizualization

Earnings season was in full swing with companies worth about $2.5 trillion reporting their latest quarterly results this week. On balance, the numbers seemed to please the street as the S&P 500 rallied around 2% from Monday to Friday. This upward shift was concentrated from Thursday afternoon to Friday close and as always, the effect of averaging hid a wide array of returns across the stock market.

As this week’s sentiment data visualizations make clear, there were marked patterns of rotation in price movement. The charts below are all plots of the weekly return for a given stock symbol, in blue, against its Sentiment Flow Index in green (Bullish or >=0) and red (Bearish or < 0). The returns across sectors were anything but homogenous.

$YHOO and $IBM had a rough start to the week and investors were happy to claw back some ground on Thursday and Friday. In contrast, $AMZN, $GOOGL, and $MSFT were shocked higher after their earnings events. The biotech sector also experienced wild gyrations within individual names with $VRX dropping over 35% while $BIIB ground out a 2% gain. Finally, the retail sector took some hits with $UA and $SKX falling with vigor.

earnings_sentiment

The increase in earnings activity translated into some big names appearing in the results of this week’s Stock Sentiment Screener which are presented below:

Group RR: Rising Sentiment + Rising Price

This group filters the market for stocks which have a combination of rising price and rising Bullish sentiment.

Energy Recovery Inc ($ERII) was in the news after it inked a $125 million deal giving $SLB exclusive use to $ERII’s clean fracking tech. The news was extremely positive for the stock sending it ripping 200% on strongly Bullish sentiment flow. The company’s earnings report is Nov 6th, but its unlikely any of that will matter as the stock market is looking forward to that new contract…

Sentiment turned very positive this week in Apple Inc ($AAPL) with 29% of messages expressing Bullish sentiment on rising price action: the stock has rallied back above $119 since reaching near term lows of $103 in late August. Looking forward, $AAPL’s next earnings release is Tuesday Oct 27th after the close.

RR

Group RF: Rising Sentiment + Falling Price

This group detects stocks which are experiencing falling price and increasing Bullish sentiment.

Rambus ($RMBS) is an interesting company that largely relies on enforcing patents for revenue. Given this model, it usually lives and dies off of legal rulings and earnings events. The stock fell 23% this week after releasing earnings. Nevertheless sentiment remained doggedly positive with nearly a quarter of message flow expressing positive sentiment.

Security firm FireEye ($FEYE) continued along its current trend: the stock is down 50% since reaching near term highs in June. Sentiment flow was net positive with 1 out of 4 messages expressing a Bullish view vs 1 in 8 on the Bear side. Keep an eye out for the company’s next earnings report on November 4th.

SolarCity ($SCTY) broke through the psychologically imporant $40 level this week despite a big wave of Bullish sentiment: 1 out of 3 messages was optimistic about the future of the firm. The stock price has been cut in half since reaching all time highs last February. $SCTY releases earnings after the close next Thursday Oct 29th.

RF

Group FR: Falling Sentiment + Rising Price:

This group finds stocks which have risen in price in the face of falling sentiment.

I always like to pay attention when Deutsche Bank ($DB) is on my radar. This probably reflects a deep well of experience staying up all hours prop trading Euro bonds (well, I didn’t really discriminate when it came to currency, actually). Unlike their American counterparts, European banks have been slower to adapt to changing markets and a transatlantic divide has developed between the two sectors

In general the $ECB has been less effective than other central banks at stimulating their economy and have tended to strangle markets (note the complete demolition of the Euribor market where there is no need to hedge short term interest rates when the $ECB offers 3-year LTRO’s on demand for banks that would otherwise have gone under).

The StockTwits community seems to believe the European monetary union is still very much capable of blowing itself up: 26% of sentiment in $DB was negative despite a rally in the stock price of late. This was one of the more lopsided sentiment pictures in this week’s screener.

Sentiment took a nose dive in Catepillar ($CAT) this week, perhaps reflecting a collective fear that the near term decline will continue unabated. The stock is trading around $71 after trading above $110 as recently as July. Some of its decline is undoubtedly driven by China’s slowdown, a lot of the company’s marginal growth came from emerging economies.

FR

Group FF: Falling Sentiment + Falling Price

This group screens for stocks which have a combination of falling prices and increasingly Bearish sentiment

VF Corp ($VFC) got smoked after releasing its earnings on Friday, dropping 13% in one day alone. This put pressure other apparel names like $RL, $NKE, and $PVH as traders desperately sought hedges to protect them from losses as they dumped $VFC . It is notable there was zero Bullish sentiment in the symbol’s message stream.

Shares in Harley Davidson ($HOG) took a skid, falling 13% on the week after some bad guidance regarding future sales. Sentiment was negative too with 14% of messages to the downside with little clamor from the Bull crowd.

FF

Group POLAR: Sentiment Divergence

This group screens for stocks which have a large number of Bullish and Bearish messages occurring at the same time.

Lumber Liquidators ($LL) is back in the screener this week as the Bulls and Bears continued to debate the future of the company. The share price fell 13% despite a divided sentiment picture. The firm releases its next quarterly earnings report on Wednesday, November 4th.

Trip Advisor ($TRIP) had an even split of sentiment flow between Bulls and Bears. This translated into sideways price action. Prices leapt last week after news was made public of a partnership with $PCLN to cross list travel bookings. $TRIP releases earnings Thursday, November 5th.

POLAR

– For the Quants you can get access to data like this using the StockTwits API.

– Make sure you follow the author of this piece MKTSTK and visit their website for more data and analysis.


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