It's earnings season, and three very different companies demand investors attention
Undeniably, it’s been a bit of a circus this year on Wall Street. Right now, though, and once more, earnings season is taking center stage. And today, three recent quarterly confessionals should have bullish investors undivided attention as stocks to buy.
On the heels of this past year’s phoenix-like rise by the broader averages out of a brief, but wildly over-the-top and historic bear market at the hands of the novel coronavirus pandemic, one might think 2020 would be a hard act to follow.
Yet, 2021 hasn’t disappointed. I suppose and as the saying goes, the show must go on, right?
From Redditors making front page news with aggressive trading schemes in GameStop (NYSE:GME) or Newegg (NASDAQ:NEGG), cryptocurrencies led by Ethereum (CCC:ETH-USD) exploding to all-time-highs and imploding to the smiles and dismay of bulls and bears alike, it’s been a dazzler.
Also, let’s not forget this past year’s dearly-held special purpose acquisition companies (SPACs) such as Blink Charging (NASDAQ:BLNK), Lordstown Motors (NASDAQ:RIDE) or other higher and no-multiple growth stocks getting slaughtered for the better part of the past six months.
To be certain, 2021 has proven memorable for some unusual reasons. Today, though, it’s time to take a step back from those sideshows and get back to the basics of earnings season. In the following, let’s look at three recent earnings events which delivered better-than-expected results and which, along with their price charts, should make these stocks to buy before the bulls come back for second servings.
- Advanced Micro Devices (NASDAQ:AMD)
- 3D Systems (NYSE:DDD)
- Berkshire Hathaway (NYSE:BRK.A,NYSE:BRK.B)
Now, let’s dive in and take a closer look at each one.
Post-Earnings Stocks to Buy: Advanced Micro Devices (AMD)
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Source: Charts by TradingView
The first of our post-earnings stocks to buy are shares of Advanced Micro Devices. This past week’s earnings was the latest confirmation AMD is a force within the world of semiconductors that’s firing on all cylinders.
Headlining the report, AMD’s lineup of chips, processors and the likes saw stronger-than-forecast quarterly sales growth of 99% and dazzling earnings per share (EPS) beat which saw income grow by 250% compared to 2020’s second quarter.
InvestorPlace’s Vandita Jadeja does a great job of diving deeper into AMD’s numbers. But this stock to buy’s price chart also makes it a long-term win for investors right now.
Technically, and as the monthly chart reveals, AMD stock has pulled back into a support area defined by Fibonacci and former resistance from a bearish head-and-shoulders topping pattern which bulls ultimately used to their advantage.
With stochastics supportively trending out of oversold territory, consider going long a September or October collar spread or maybe a modified variation of that strategy for this stock to buy.
3D Systems (DDD)
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Source: Charts by TradingView
The next of our post-earnings stocks to buy is 3D Systems. Earnings and revenues for the diversified additive printing outfit crushed Wall Street forecasts. Sales rocketed higher by 44%, while easily surpassing analyst views of 27%.
Importantly, the report also showed DDD’s success wasn’t just an easy comparison due to last year’s coronavirus-related challenges. Nope. This stock to buy also saw its sales surpass its pre-pandemic levels. Adjusted EPS of 12 cents also more than doubled consensus estimates.
Technically, and following a massively positive earnings reaction, shares have quickly retreated to test a 50% level tied to DDD stock’s second pivot low that’s developed as part of a deep but bullish ‘W’ base.
Some investors will insist 3D’s shares are in no-man’s land until the pattern’s mid-pivot is successfully cleared. But I’m upbeat this is a stock to buy with confidence right now.
With DDD stock’s stochastics offering nice support and given a history of volatile moves which rarely provide cookie cutter entries, a September $35/$42 collar combination looks like a great way, off and on the price chart, to position in this stock to buy.
Berkshire Hathaway (BRK.A,BRK.B)
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Source: Charts by TradingView
The last of our post earnings stocks to buy are shares of Berkshire Hathaway. That’s right, the holding company for legendary value investor Warren Buffett.
The Oracle of Omaha may have slipped up by famously declaring “the world has changed” last year during the worst of the pandemic. You may or may not agree.
More importantly, stronger-than-expected earnings last week confirm that while 2021 hasn’t been your granddad’s stock market in many respects, his style of investing remains timeless and a force to be reckoned with.
Right now, shares of this stock to buy are forming a modest, corrective cup-shaped base. So, like your elders, it’s worth respecting. It’s also bullish. Thus, in our mind, there’s more too.
This stock to buy’s pattern reminds me of the Oracle’s timeless advice, “Price is what you pay. Value is what you get.” It also prompts me to appreciate why a hedged September $280/$310 collar may cost a little upfront, but more appreciatively is capital put to good use.
On the date of publication, Chris Tyler holds (either directly or indirectly) positions in Grayscale Ethereum Trusts (ETHE and ETCG), Advanced Micro Devices (AMD) and 3D Systems (DDD). The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CATandStockTwits.
The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.
