Alcoa's (NYSE: AA ) third-quarter earnings report on Wednesday will serve as a whole lot more than commentary on a single aluminum company.
Investors will be looking at Alcoa's earnings for signs of life in the broader economy and the materials markets. The report will also serve as the kickoff of third-quarter earnings season, when companies will try to prove that investor confidence since the March market bottom has been warranted.
But at the same time, the earnings report will be a glimpse at how Alcoa itself is performing. Will it best the $0.12-per-share loss that Wall Street analysts are expecting? Will it show continued improvement in cash production? Will the company's operational efficiency efforts prove worthwhile?
For some perspective on how investors see Alcoa, we can turn to the collective opinion of the Motley Fool CAPS community. The stock has 2,509 outperform calls versus 185 underperforms, giving it a four-star rating (out of a possible five).
While a great many CAPS members have scored big points by betting on Alcoa, none have done better than current Alcoa score leader gembree, who has made three outperform calls on Alcoa, nabbing a cool 124 points on those timely calls.
gembree is one of CAPS' All-Stars -- players with a rating of 80 or greater -- and has managed an impressive stock-picking accuracy of 84% while racking up nearly 9,500 points. Alcoa isn't this player's only great call. Here's a look at a few of the other prescient picks:
|
Company
|
Date Picked
|
Date Ended
|
Call
|
Points
|
CAPS Rating
(out of 5)
|
|
Dow Chemical (NYSE: DOW )
|
3/18/09
|
Still Open
|
Outperform
|
191
|
****
|
|
Whole Foods Market (Nasdaq: WFMI )
|
12/17/08
|
9/11/09
|
Outperform
|
144
|
**
|
|
Silver Wheaton (NYSE: SLW )
|
10/20/08
|
9/11/09
|
Outperform
|
143
|
****
|
Data from CAPS.
So what has this investor been looking at more recently? Here are a few of the most recent calls on CAPS:
|
Company
|
Date Picked
|
Call
|
CAPS Rating
(out of 5)
|
|
Novavax (Nasdaq: NVAX )
|
10/5/09
|
Underperform
|
*
|
|
Research In Motion (Nasdaq: RIMM )
|
9/25/09
|
Outperform
|
**
|
|
Raser Technologies (NYSE: RZ )
|
9/25/09
|
Underperform
|
*
|
Data from CAPS.
While not all of these picks may pan out, they could be a good place to start further research. I decided to take a closer look at BlackBerry maker Research In Motion.
A smart(phone) opportunity?
Shares of Research In Motion were dialing 911 after the company reported quarterly results in late September. It managed to churn out earnings of $1.03 per share -- above Wall Street's $1.00 expectation -- though revenue fell short of the analysts' mark.
It was RIMM's outlook, though, that knocked the wheels off the cart. The earnings guidance range of $1.00 to $1.08 captured the $1.05 that analysts were looking for, but the top end of the company's revenue guidance fell short of expectations. While it may not seem like much to get all fired up about, the 17% decline in the stock when earnings were announced suggests that investors had high hopes.
The dip in the stock caused some major action on CAPS, with quite a number of members (including gembree) making a move on RIMM the day it reported earnings. CAPS All-Star jamespeer gave the stock a thumbs-up, saying:
OVER-reaction. Not uncommon in todays market, seems like all we see nowadays are over-reactions. I expect this stock to recover fully by Q4...
But that doesn't mean the tide is fully turning for this two-star stock. On the same day, fellow CAPS All-Star TMFBent weighed in with some concerns about competition:
I think they get cooked by the iPhone. They don't have an ecosystem to support themselves, and what they provide is now pretty easily replaced.
But here's the important question: What's your take? Will Research In Motion continue to feel the heat from competition? Get in the action by clicking over to CAPS. It's absolutely free and already has more than 40,000 stock pickers chipping in to find the best stocks out there.
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