Is Earnings Season Overrated? Try Highly Rated!

We’re in the prime of earnings season!

For Research Analyst Kelly Green, dissecting the data that’s generated during this period is the lifeblood of her work. She’s been studying market trends for the past decade and has a license to sell nearly all types of securities. 

As a contributor to Weiss Ratings Daily, Kelly highlights different companies, using thousands of data points in our Weiss Ratings model.

Weiss Ratings Financial News Anchor Jessica Borg interviewed Kelly, and the two discussed two automakers that belong in investors’ portfolios, three long-term, dividend-paying stocks and whether a price pullback means a good buying opportunity or a hint to leave a share alone.
 
 You can watch the video segment or continue reading for the full transcript.

Jessica Borg (narration): It’s the time where investors can see how companies fared in the fourth quarter of last year.

JB: Kelly, earnings season is all about data!

Kelly Green: I like data, so my favorite time is earnings season.  

JB (narration): Research Analyst Kelly Green says this year will be key in evaluating a company’s true prospects.

KG: I know people are tired of hearing about the pandemic effect, but we saw stocks hit the bottom, and then we saw them go straight up.  

So, this is going to be the year where we see if companies will actually continue to grow, or if it was just a growth in relation to the bottom that we saw in 2020 —especially for tech.  

We can get so excited about the technology, and we can see all the future potential versus: “Is the company making money?”

JB (narration): Now’s the time to cross-reference announcements like mergers, management changes or products that companies made.

KG: Any prudent investor is going to follow the press releases for companies that they’re invested in, so when we get the full quarter data, you can see how individual events affected the books, overall.

JB (narration): In recent months, there’s been a rotation out of tech stocks into value stocks.

Soon, you might see sectors sort of merge.

KG: Ford Motor Company (F) is an interesting company because it’s an automotive company, but now it’s trying to be a tech company.

My brother and his wife have their smartphones set, so whatever time they have to leave for work, their car starts — their Ford cars — 15 minutes before they have to get in their cars and leave for work.  

Ford is not just looking at if it can make an electric vehicle, but how your vehicle can be connected to the rest of your life.

So, I think there will be opportunities where you’re not going to have to choose between value and tech.

JB (narration): And dominance will be up for grabs.

KG: Is Ford going to be an electric vehicle (EV) leader, or maybe Lucid Group (LCID)?

Lucid shares are up. Ford is a long-term player. Lucid is a short-term growth player. There’s room in your portfolio for both.  

JB (narration): Ford announced in October it would reinstate its regular quarterly dividends, after suspending them as a cost-saving measure in March of 2020.

It’s now distributing 10 cents per share.

JB: You’re a big fan of dividends. How should investors view dividends in this climate?

KG: My specialty and my heart is with dividend stocks, and it always has been.

I love dividend stocks because if you can pay a dividend, you have extra money.

Generally, if you have the extra money to pay your shareholders, you’re in a good position. 

Walmart (WMT), Waste Management (WM), The Clorox Company (CLX) — those things have continued to pay you dividends for over 100 years, and they will probably pay dividends for another 100 years.

JB (narration): In Weiss Ratings Daily, Kelly writes about using the Weiss Ratings stock screener and its filters, to see which stocks are climbing and which stocks might be sliding.

KG: If my long-term holds start to slide down in the ratings, then I start to dig deeper into the numbers.

If my dividend payers slide down into a “B” range, that’s OK, but a “B-” may mean it’s not the safest place for my money anymore.

JB (narration): The site’s watchlist function is also your friend. You’ll get email alerts if there’s any change with a stock you’re following.

Kelly has Nokia (NOK) on her watchlist. A recent alert told her shares had been up .05%, for the past 60 days.

Nokia is a volatile but interesting stock. It may have lots of competition in the cell phone world, but it shouldn’t be overlooked.   

KG: It’s a company that’s on my radar because they work with infrastructure — towers, small cells — we need it to move from 3G to 4G, and then from 4G to 5G.   Researchers are already working on 6G and 7G.

It’s interesting because they create components that are going to be needed if we complete this expansion.

My favorite part of Nokia is that in 2020 they were selected by NASA to put the first network on the moon.

JB: How can investors tell if a stock has dipped, whether it’s a good buying opportunity, or they should just leave it alone?

If it just dips into the sell range occasionally, then maybe that’s a buying opportunity, or if it just dips into the hold range.

When we look at individual stocks, it’s about the patterns.

And when you look at the ratings history, there’s always a little sentence that tells you why it dropped. The more data you have, the more that data means something.

JB (narration): So, use all the tools here to make sense of that data and invest accordingly.

KG: Thanks, Jessica. It’s always a pleasure.

Best wishes,

The Weiss Ratings Team