Watch Out For This “Dirty” Trick by Companies

JOIN ME LIVE @ 8am PT / 11am ET ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [LIVE TRADING SESSION! REGISTER NOW!]( Hello investor We are in the middle of the earnings season. So, I am going to talk about a “dirty” trick that companies love to use to report better earnings – especially in a slowing economy. CFOs know that Wall Street loves earnings growth. So, they often manipulate earnings to make their companies look more profitable. Why? Determining earnings is more like an “art” rather than a science. Adjusted earnings are much more likely to be massaged. For example, companies would conveniently exclude “one-time” items like a write-down of a bad acquisition. But the write-down is a real cost to the company. Or they could cut marketing costs or layoff people to show a bigger earnings growth at the expense of long-term profit. Meaning? It doesn’t fully reflect the true performance of the business. But sales growth is difficult to fake. It is a real number, and executives are forbidden to “massage’ the number. So, you should pay attention to sales growth (versus past few quarters) to measure a busines’s performance – rather than relying exclusively on earnings. We are now at the point where companies massage earnings growth to make up for a slowing economy. Let’s look at Hancock Whitney which reported earnings on Tuesday. It missed revenue but beat the EPS expectation: It was the same theme in the last three quarters where it missed on revenue in two quarters but beat all quarters for earnings: As an investor, you want to be careful with companies that grow earnings on stagnating sales. This is something for you to watch out, as companies will try to maintain earnings growth creatively in a high-interest-rate environment. Here are some things that companies can do to boost earnings growth: - Changing tax rates (hence the earnings growth boom during the Trump administration) - Changing share counts (through share buybacks) - Pension gains - One-time gains (often from selling off businesses) - Big cost-cutting projects Want to learn more trading tips like this? Join my LIVE webclass to learn how I am using AI data to find top momentum trades. Come and join me at 8am PT / 11am ET. Hit the button below to register: [JOIN ME LIVE @ 8am PT / 11am ET]( * We will attempt to trade in a paper-trading account – not with a real portfolio. No returns are guaranteed. No longer want to receive these emails? [Unsubscribe](. Trade Algo 401 Park Ave S New York, NY 10016, NY 10016