| Earnings season can make investing tricky. Many investors try to time trades based on earnings announcements, but usually find such trading is inconsistent and risky. It is often better to take a look at how the market has reacted to a company’s results a few weeks after the initial announcement. Thor Industries Inc. (THO) delivered its earnings filing on 12/01. The company reported a change in quarter-over-quarter sales of 14.52% and posted an EPS (trailing twelve months) of .64.
By now the market has had time to settle in and look closely at the numbers. A stock’s performance in the few weeks following an announcement, compared to other stocks in its industry, the industry as a whole, and market as a whole, really tells you how investors and analysts felt about the announcement. Compared to peers One way to gauge performance is look at a stock compared to other stocks in its industry with similar market caps. THO peer Polaris Industries, Inc. (PII) has seen a .55% stock price gain over about the last month, while another peer, Harley-Davidson, Inc. (HOG) saw a -10.06% gain (loss). So with a return of 8.26%, Thor Industries Inc. outgained PII and beat HOG’s price performance over the last month. Compared to the S&P 500 Index Finally, let’s see how Thor Industries Inc. stock performance compares to the rest of the market by looking at it compared to the Standard & Poor’s 500 Index (.INX). Since 12/01, the S&P 500 index has returned around 3.3%, and again, THO saw about a 8.26% gain during that time. Not bad. Compared to the rest of the “Recreational Vehicles” industry Since the THO announcement (about 30 days ago), the stock has posted a 8.26% gain. Over that same period, the stock’s industry, Recreational Vehicles, saw a -4.48% gain (loss). That means THO that has outperformed its industry as a whole 284.38% since the earnings announcement. Small differences aren’t significant, but when the spread is large it indicates the stock is either much more or much less favored than its group as a whole. So by putting the returns in context by these comparisons, we can see how a stock’s performance since earnings really measures up and make our investing decisions on THO accordingly. More articles on our home page...
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