Leigh Drogen

About the Author Leigh Drogen

Leigh Drogen is the Founder and CEO of Estimize. Estimize is an open financial estimates platform which facilitates the aggregation of fundamental estimates from independent, buy-side, and sell-side analysts, along with those of industry experts, private investors and students. By sourcing estimates from a diverse community of individuals, Estimize provides both a more accurate and more representative view of expectations compared to sell side only data. Leigh started his career as a quant trader at Geller Capital, a White Plains, NY based fund where he ran strategies that looked at earnings acceleration and analyst estimate revision models, as well as price momentum and several sentiment indicators. Leigh later went on to be the founder of Surfview Capital, a New York based asset management firm that used many of the same strategies as Geller Capital, with a focus on higher beta names on an intermediate term time frame. His educational background includes focus in economics and international relations, specifically war theory. He is a graduate with honors from Hunter College in New York City. You can contact Leigh by emailing him at Leigh@estimize.com

5 Stocks To Watch This Week 2-23-15

Tuesday – Home Depot

Home Depot (NYSE:HD), the largest home improvement retailer in the United States, will report 4th-quarter earnings before the opening on Tuesday. The company’s stock has been soaring in recent years on positive housing recovery data and a controlled expansion into e-commerce.

On last quarter’s earnings call, freshly appointed CEO, Craig Menear said, “The U.S. housing recovery continues to track in line with our expectations, with home price appreciation and housing turnover being the drivers of growth for our business”. On Monday morning, the housing recovery hit a bump in the road as existing home sales came in 4.8% below crowdsourced expectations.

Although January’s existing housing sales were poor, on Tuesday, contributing analysts on Estimize expect Home Depot’s earnings to continue rising and reflect overall housing sector growth. The consensus expectation is that Home Depot will report earnings of 91 cents per share, 2 cents better than Wall Street is forecasting.

Estimize contributors also believe Home Depot’s 4th-quarter profits will improve by 25% compared to last year. That would be a small improvement on top of the 23% and 21% gains reported respectively over the past two quarters.

Tuesday – Home Away

Vacation home rental company Home Away (NASDAQ:AWAY) is set to deliver its earnings on Tuesday, after the close. Strong results from Marriott (NASDAQ:MAR) and Priceline (NASDAQ:PCLN) suggest that American travel habits are back on the upswing.

There may be juice in the travel industry right now, but HomeAway competes most directly with privately held Airbnb. Airbnb’s most recent disclosures contain evidence of a “dramatic acceleration”, according to Cowen and Co. Cowen expects Airbnb to overtake HomeAway’s booking numbers within the next 3 years.

This quarter, Estimize contributors are projecting earnings to rise 5 cents per share, from 8 cents in EPS to 13 cents. Earnings of 13 cents per share would leave HomeAway 1 cent shy of the Wall Street consensus.

On the top line, the Estimize community is looking for a modest beat. Contributors expect vacation rentals to push HomeAway roughly 1% above the Street’s view. Contributing analysts are forecasting revenue of $109.8 million, which would reflect a 22% year-over-year increase. A 22% increase could be a harbinger of a slowdown for HomeAway, which had been improving sales by at least 30% in each of the past 3 quarters.

Tuesday – Boston Beer Co.

Boston Beer Co. (NYSE:SAM), the brewer of Sam Adams and Angry Orchard hard ciders, also reports on Tuesday. Boston Beer has benefited from being an early adopter of the craft beer movement, and has surged on the popularity of its new but skyrocketing cider business.

In the past year, Boston Beer has stepped on the gas. Since the start of last year, earnings have grown by at least 22% each quarter and revenue has been increasing by a minimum of 25%.

The Estimize community is setting the bar high this week, expecting Boston Beer to beat the Street’s consensus by 9 cents per share on the bottom line and $6 million (2.5%) in revenue.

Thursday – Weight Watchers

Crain’s published an article earlier this month about how Weight Watchers International (NYSE:WTW) has become the most heavily shorted stock. Long story short: dieters are ditching Weight Watchers, and investors are piling in to bet against any sort of recovery. At the time of the publication, a larger percentage of Weigh Watchers shares had been sold short than any other stock on the NYSE.

This quarter, analysts on Estimize are expecting Weight Watchers to come up short on revenue but top of Wall Street’s EPS consensus by a few cents per share. Even still, 4th-quarter earnings are projected to drop dramatically from 54 cents per share to just 11 cents.

Contributors project that revenue will come in a hair below $336 million, virtually flat compared to last year’s tally.

Thursday – Herbalife

International multi-level marketing nutrition company Herbalife (NYSE:HLF) is scheduled to report 4th-quarter earnings on Thursday afternoon. Like Weight Watchers, many investors are betting against Herbalife. Last year, Herbalife stock lost more than half its value. Hedge fund manager Bill Ackman has been leading a crusade against the company, and has accused Herbalife of running an international pyramid scheme.

Although the stock got crushed last year, 2013 was just as positive of a year as 2014 was negative. A long string of large earnings beats and an investment from Carl Icahn fueled Herbalife’s fire two years ago.

Herbalife’s winning streak was snapped six months ago, when the company failed to live up to expectations in its 2nd quarter of 2014. Herbalife missed on the top and bottom line again last quarter, and the stock was punished even further.

Heading into Thursday’s report, Estimize contributors share a subdued outlook. The consensus expectation is that 4th-quarter earnings will fall from $1.28 last year to $1.22. Revenue growth has decelerated rapidly in the past 6 months from 20% to 4%, and is forecast to decrease by 9% this quarter.

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