5 Foolish Favorites That Could Make Big Moves This Earnings Season

September has come and gone. For most people, that means warmer clothes, changing colors outside, and waking up before the sun has started rising.

But for investors, it also means the end of the third quarter, and the beginning of earnings season. We here at the Fool encourage investing with a long-term time horizon. That means that we should take a balanced view of quarterly earnings reports, paying attention, but never giving too much weight to any one report.

At the same time, if your favorite stock could experience a huge swing, its best to prepare yourself emotionally, and understand why such moves might occur.

Read below to find out why five popular stocks could make big moves this earnings season, and at the end of each section, you can get access to special premium reports on each company.

But first, the backstory...
In April, I singled out five companies that were poised to make big moves based on the fact that many traders were betting against them. If a highly shorted company releases positive news, a short squeeze will be on. If news is bad, shorting could continue indefinitely.

It turns out I was right: The stocks I mentioned moved an average of 16% on their first-quarter earnings releases.

I did the same thing again this summer, and the results were eerily similar: The average stock moved almost 20% after earnings were announced.

Below are the five stocks that could make big moves in the weeks ahead.

Company

Earnings Date

Expected EPS

Expected Revenue

MAKO Surgical (Nasdaq: MAKO  ) Nov. 1 ($0.16) $27.4 million
Green Mountain Coffee Roasters (Nasdaq: GMCR  ) Nov. 5 $0.48 $903 million
Clean Energy Fuels (Nasdaq: CLNE  ) Nov. 7 ($0.18) $75.8 million
First Solar (Nasdaq: FSLR  ) Oct. 29 $1.01 $960 million
SodaStream (Nasdaq: SODA  ) Nov. 5 $0.72 $104 million

Source: E*TRADE.

MAKO Surgical
Let's start off with MAKO Surgical, which produces the RIO robotic arm to assist doctors with knee and hip replacements. The stock was on the list of potential big movers at the end of both the first and second quarters. Currently, 36% of the shares are being sold short.

This may have to do with the fact that the company has had trouble lately in accurately foreseeing sales trends.  This may be due, in part, to the fact that the company must now transition from early adopters to more mainstream hospitals that see the benefits of the product.

Green Mountain Coffee Roasters
The stock of my favorite at-home coffee brewer has had one tumultuous year. Whether it's the expiration of patents or being called out by big-name personalities, it's been a wild ride in 2012. Overall, the stock is down about 50% on the year, and yet it still has 31% of its shares being sold short.

Moving forward, many investors will likely be keeping their eye on how Green Mountain's inventory looks, as it's been building up unexpectedly. They'll also be looking for any hint whatsoever that the expiring patents might have an effect on sales.

Clean Energy Fuels
This company, led by chairman T. Boone Pickens, is setting out to create the infrastructure necessary to make natural gas a viable alternative to petroleum-based fuels. It's doing this by building natural gas fueling stations along major U.S. highways.

The problem with being a first mover in a business that isn't guaranteed success is that there's a lot of spending up front. Clean Energy has yet to turn a profit, and currently has 31% of its available shares sold short.

Fool analyst Jason Moser has already bought shares of Clean Energy for his portfolio, and he sees lots of upside to the company. Keep an eye on the stock before the company's Nov. 7 earnings date.

First Solar
Like many other companies on this list, First Solar has had a roller-coaster year. Shares are currently 40% lower than they were at the start of the year, and some investors still think there's room to fall: Almost 50% of available shares are currently being shorted.

Shares plunged recently on an analyst downgrade based on product reliability. Moving forward, government support will be a key topic to keep an eye on.

SodaStream
Finally, we have what many consider to be a cousin company to Green Mountain. But as many Fools have pointed out, SodaStream is a company entirely distinct from Green Mountain. While that may be true, many on Wall Street believe the company is in for tough times, with almost half of all shares available being sold short.

Unlike the other companies on this list, SodaStream's stock is actually up on the year, and has impressive growth rates to boot. This might be a tempting stock if you're only going to look at one of these five. To get the full story, read Fool analyst Jim Mueller's special premium report on the company, which examines the opportunities and risks it faces. Click here to get your copy today.

As I said in the beginning, it's impossible to predict with any accuracy which way these stocks may move, but there are certain variables in place that make them ripe for volatility.

Fool contributor Brian Stoffel owns shares of MAKO Surgical. The Motley Fool owns shares of Clean Energy Fuels, MAKO Surgical, and SodaStream International. Motley Fool newsletter services have recommended buying shares of Clean Energy Fuels, MAKO Surgical, SodaStream International, and Green Mountain Coffee Roasters, and creating a bear put spread position in Green Mountain Coffee Roasters. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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