A company's earnings guidance can be an invaluable tool for investors, offering important information about a company straight from the horse's mouth. Most corporate management teams issue quarterly statements predicting the company's future sales or earnings; these projections can help investors more accurately evaluate a company's earnings potential.
Earnings guidance evolved out of the practice of "whisper numbers," whereby intel was selectively handed out to analysts, then passed onto only their top clients -- today, regulations dictate that company expectations be made public, thereby leveling the playing field.
Since company management knows their business better than anyone else, their comments should theoretically be more reliable than analyst reports, or any other info the average investor is privy to.
Here is a list of companies raising guidance above analyst estimates, despite the fact that institutional investors and mutual funds have been net sellers over the last two quarters. Are institutional investors too bearish on these names? Have they been underestimating these names? And how long will it be before selling turns into buying? (Click here to access free, interactive tools to analyze these ideas.)
Institutional data sourced from Fidelity. The list has been sorted alphabetically.
|
Company |
Guidance |
Institutional Flows |
|---|---|---|
|
Aetna |
Recently guided FY11 at $3.70-3.80 vs. an estimate of $3.27 |
Institutional investors sold 17.7M shares during the most recent quarter, vs. 13M shares sold during the previous quarter. During the most recent quarter, mutual fund investors sold 4.1M shares, vs. 760.5K shares sold in the previous quarter |
|
Aeropostale |
Recently guided Q4 at $0.96-0.97 vs. estimate of $0.95 |
Institutional investors sold 3.9M shares during the most recent quarter, vs. 5.9M shares sold during the previous quarter. During the most recent quarter, mutual fund investors sold 2.1M shares, vs. 839.4K shares sold in the previous quarter |
|
AsiaInfo-Linkage |
Recently guided Q1 at $0.37-0.39 vs. an estimate of $0.36 |
Institutional investors sold 2.2M shares during the most recent quarter, vs. 1.8M shares sold during the previous quarter. During the most recent quarter, mutual fund investors sold 1.7M shares, vs. 1.2M shares sold in the previous quarter |
|
American Water Works Company |
Recently guided FY11 at $1.65-1.75 vs. an estimate of $1.65 |
Institutional investors sold 4.3M shares during the most recent quarter, vs. 3.5M shares sold during the previous quarter. During the most recent quarter, mutual fund investors sold 2.2M shares, vs. 2.2M shares sold in the previous quarter |
|
The TJX Companies |
Recently said it sees Q4 EPS above the previously guided range of $0.97-1.01 vs. an estimate of $1.00 |
Institutional investors sold 12M shares during the most recent quarter, vs. 3.8M shares sold during the previous quarter. During the most recent quarter, mutual fund investors sold 1.6M shares, vs. 6M shares sold in the previous quarter |
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.
Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.
