Reports after the close tomorrow. Fundamentally I will score it at 8 out of 10. Also, it has a history of beating earnings. It beat earnings estimates the last eight quarters. Of the last fifteen quarters, it beat thirteen times (one miss and one in-line report).
It has not been that lucky with revenue though. It has missed revenue seven times in the last fifteen quarters. But unlike most stocks, it has a simple problem. Whenever it beats earnings it makes a big gap up regardless of revenue. And when it misses, there is a big gap down (regardless of revenue). There have only been two exceptions (in the fifteen reports) whereby it beat earnings but gapped lower. But the gaps were different from other earnings gaps in that they were small gaps that were recovered/closed the same day. So if GMCR beats earnings tomorrow (as I'm expecting), I expect a big open on Thursday.
While revenue does not play a key rule, beating earnings and revenue will be very good for the stock. But if it makes a small gap down after beating earnings (and revenue), expect it to recover immediately. Assuming that a small gap down takes place, I will look to close the position when it moves back up to Wednesday's close or open depending on which comes first. Hopefully the gap will also be closed at that point.
Technically, it is bullish. See GMCR-WEELY and GMCR-DAILY charts below.
So, based on the fundamentals and technicals, I will buy September Calls.
GMCR-WEEKLY
GMCR-DAILY
GOOGL-15MIN
TWTR-15MIN
SPX-DAILY III
SPX-DAILY II
SPX-DAILY I
SPX-30MIN
SPY-15MIN
