Catalysts and Calendars

This article was originally posted in the Thematic Investor premium product. To see more quality pieces like this, subscribe now to the Thematic Investor. Last week, I mentioned that “ just because something is cheap does not mean it is going to rise in value. Rather for that to happen there needs to be a catalyst” and I went on to describe some catalysts. The natural follow up question is – “how do we know when a catalyst is coming?” Just as we must keep on the look out for solid investments, so too must we do so with those events that may give rise to new product announcements, strategic shifts or an update to a company's outlook. The question then quickly becomes how do we know when a company may make such news? In general, we don't, however by examining a company's Investor Relations web page and by becoming aware of key industry events, we can piece together potential dates when a company may share some information that we as investors would deem a noteworthy catalyst for the company's stock. After re-reading that last sentence, it seems to me a few examples are called for. Example 1 – Industry events. If you were to simply scan the general news on CNN.com or some other news site and look at Technology News, you would find a smattering of headlines relating to CES. For the uninitiated, CES is the Consumer Electronics Show that runs every year in early January and it is one of the larger venues for new consumer electronic devices to be announced. From TVs to mobile phones to gaming devices to iPad competitors and more, CES is not only the first major event of year but it's where nearly all the major players tend to make announcements. Even this year, AT&T (T) has shared it plans for it next generation 4G mobile network, Research in Motion (RIMM) announced its 4G Playbook, an iPad competitor, will be coming to Sprint (S) in 2011 and Microsoft (MSFT) shared that it sold more than 8 million Kinect units in the first 60 days of that product being available. Now let's take a step back and see what other industry events are on the horizon for the intersecting worlds of consumer devices and connected devices. There are a few worth noting. From February 14-17 this year, the Mobile World Congress (MWC) will be held in Barcelona. The International CTIA Wireless 2011 convention is on tap from March 21-24 in Orlando, Florida this year. Both of these tend to favor new mobile product announcements and I suspect this year that will mean more smartphones, pads and other connected devices. These industry events are not relegated to certain industries, such as technology even though those tend to grab far more headlines. This week the 13th annual ICR XChange, an event that allows both public and private companies to present to investors and more, is on tap. I count more than 100 public companies – from Caribou Coffee (CBOU) to Physician's Formula (FACE) to Urban Outfitters (URBN) and Chipotle Mexican Grill (CMG) and more – discussing their respective industries and businesses at this event from January 12-13. These industry conferences and events tend to lend themselves to new product or service announcements and other strategic initiatives. For example, the aforementioned Research in Motion Playbook while being announced several weeks ago, more details on how it will be positioned against Apple's iPad were shared at CES. Example 2 – Investment Bank Conferences. Kopin Corp. (KOPN) is a company that I have been following for some time and a few days ago I received an email notification that the management team will be presenting at the Needham & Company Growth Conference. There are numerous of these types of conferences throughout the year put on by firms such as Citigroup Inc., Morgan Stanley, JPMorgan Chase & Co., and others. The easiest way to learn where and when a company your interested in is presenting at one of these conferences is to look at the Events and Presentations section of the company Investor Relations web page. I tend to look for press releases around these events to see if a company is updating or affirming its near term outlook. Example 3- Company Earnings. Almost like clockwork, we once again have corporate earnings in front of us. This begins with Alcoa Inc (AA). on January 10 and will run its course over the next few weeks. Again, most if not all the companies you are following or are interested in will post these reporting dates on the Investor Relations page of their web site. In terms of a catalyst, there are two-fold when it comes to corporate earnings. The first is whether or not the company meets, beats or exceeds the Street's consensus revenue and earnings expectations. The current expectations for Alcoa's December 2010 quarter are $5.68 billion in revenue and earnings of $0.19 per share. The other catalyst is whether or not the company meets, beats or exceeds the consensus expectation as it pertains to the company's outlook. Generally speaking, good things tend to happen when a company raises its outlook and poor things when they lower it. As I write this, the Street expects Alcoa to earn $1.10 in earnings per share on $23.43 billion in revenue in 2011. As with most of investing, there is no silver bullet and, at least in my view, a mosaic is called for. This calendar building exercise is but part of that mosaic and consuming those calendar items falls into the category of basic homework for an informed investor. With all of that in mind, I am launching The Thematic Investor Calendar, which tracks key dates and other upcoming events for those companies that have been discussed in The Thematic Investor. Kopin Corp. (KOPN) • Needham & Company Growth Conference – January 12 • Skyworks Solutions, Inc - Needham & Company Growth Conference – January 13 • GSMA Mobile World Congress, Barcelona, Spain – February 14-17 Equinix, Inc. (EQIX) • Akamai Technologies, Inc. quarterly earnings – February 9 • GSMA Mobile World Congress, Barcelona, Spain – February 14-17 Hanesbrands, Inc. (HBI) • Wal-Mart Stores, Inc. quarterly earnings – January 22 • Limited Brands, Inc. quarterly earnings – January 23 • Target Corp. quarterly earnings – February 24 Big Lots, Inc. (BIG) • 4Q10 sales release – February 2011 • Wal-Mart Stores, Inc. quarterly earnings – January 22 • Target Corp. quarterly earnings – February 24 • 4Q10 earnings release – March 2011 Trinity Industries, Inc. (TRN) • Quarterly dividend record date – January 14 • GATX Corporation quarterly earnings – January 20 • Union Pacific Corp. quarterly earnings – January 20 • CSX Corp. quarterly earnings – January 24 • Quarterly dividend payable – January 31 Molycorp, Inc. (MCP) - Not available Research in Motion Ltd. (RIMM) • Verizon Communications event – January 11 • Apple Inc quarterly earnings – January 18 • HTC Corp. quarterly earnings – January 21 • AT&T Inc. quarterly earnings – January 27 • Microsoft Corp. quarterly earnings – January 27 • Nokia Corp. quarterly earnings – January 27 • GSMA Mobile World Congress, Barcelona, Spain – February 14-17 McCormick & Company, Inc. (MKC) • Quarterly dividend payable – January 14 InterDigital, Inc. (IDCC) • Kaufman Bros. Second Annual Technology Trends Conference – January 11 • Eleventh Annual CJS Securities “New Ideas for the New Year” Investor Conference – January 12 • Dividend record date – January 12 • Apple Inc quarterly earnings – January 18 • HTC Corp. quarterly earnings – January 21 • Qualcomm, Inc. quarterly earnings – January 26 • GSMA Mobile World Congress, Barcelona, Spain – February 14-17 Medifast, Inc. (MED) • ICR XChange Conference – January 13 • Weight Watchers International, Inc. at JP Morgan HealthCare Conference – January 13 Once again, great articles like this are available on the Thematic Investor. Subscribe today!