I’ll admit it. One of the less enjoyable parts of my job is covering earnings conference calls that companies do after they’ve announced their quarterly results. Some of the guys on my team are really into the calls and listen to all of the ones they can get on. Being primarily a technician, they just aren’t my thing. You can imagine how much of a drag it can be to have to spend a hour plus listening to managers talk about their business and analysts asking them questions, especially when you don’t really understand it all – and some of the stuff is very niche.
That said, there’s definitely value there. If I were an investor (or prospective one) in a company, I’d definitely want to listen in to the calls. You can often gleen a few little nuggets out of what management says – stuff that doesn’t come through so well from the earnings reports.
It’s also worth noting that sometimes what happens on a conference call can cause enormous volatility in the stock. Just today one of my colleagues was on a call that went badly. The company had been up like 6% overnight, but during the call it was down like 7%. And that’s not even one of the bigger moves. Some calls, especially when they get into the Q&A portion, can get really ugly.
The bottom line is that if you’re focused on a certain stock, it’s probably worth listening in to the quarterly calls. They are generally freely accessible via the company’s website.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
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