Current Market Sentiment Could Provide the Perfect Storm for Launching Buy on Pullback Model Portfolio 13 During Earnings Season [GeoWire Weekly No. 175]

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Highlights Buy on Pullback (BOP) Portfolio #12 Closed – closing return of 30.55%, 13.16% higher than the S&P 500. Set up for another Buy on Pullback Portfolio is Ripe – Given that we are nearing the heart of the earnings season in the midst of a negative-leaning market sentiment, pullback opportunities are likely. Leaning on Press Release Research Tool – During earnings season, investors should use the just released PRaaP application, a research platform with a heavy emphasis on efficient navigation and filtering of real time press releases through category and keyword filtering. Notable Earnings Mention – FTGFF (FTG.TO) Q4 2024 non-GAAPnumbers surpass our expectations.

How Close Are We To Launching Buy On Pullback Model Portfolio #13?

The most talked about news of the week wasn’t stock-related—it was the sharp market pullback and Warren Buffett going to his biggest cash position as a percentage of assets, ever. The S&P 500 declined by 1.54% for the week, with a drop of 1.7% on Friday. 

As expected, small-cap stocks took the hardest hit. The iShares Russell 2000 ETF (IWM) fell approximately 4.1% for the week, while the iShares Micro-Cap ETF (IWC) declined 4.4%.

While many investors are panicking over last week’s market performance, we see this as an opportunity. These are exactly the types of market conditions that allow us to execute our Buy on Pullback (BOP) strategy. Right now, market weakness is aligning perfectly with the earnings release schedule for micro-cap stocks.

If you’re new to the investing game, larger-cap companies typically report earnings fairly quickly after the quarter ends, while micro-cap companies often take longer, sometimes waiting until the final deadline allowed by the SEC. Generally, small companies have up to 45 days to file quarterly reports and up to 90 days for annual reports, giving them more time than their larger counterparts. Extensions are allowed if companies need time past the standard deadlines–5 calendar days for 10-Qs and 15 calendar days for 10-Ks.

Over the next few weeks, we’ll start seeing 2024 year-end microcap earnings reports roll in at a rapid pace.

If the market remains weak during this period, many great earnings reports may go unnoticed by investors. Additionally, stocks that report a temporary, one-time dip in earnings could get punished more than usual. This creates an ideal setup for launching Buy on Pullback Model Portfolio #13..

This potential set-up is one reason we decided to close Buy on Pullback Portfolio 12 last week.  Following the track record of previous model portfolios, we were able to close it with solid gains and significant alpha over the broader market, with a final average closing return of 30.55%, 13.16% higher than the S&P 500 during its 6.6 month shelf life. Unfortunately, we did not retire BOP #12 at near the peak average return of 75.18%.

Now, with portfolio #12 closed, and 9 years of documented BOP data on our website, we can continue to relay a message that our Buy on Pullback (BOP) portfolios outperform.  They’ve historically outperformed the S&P 500 by an average of 26.14%, and have an average duration of about 13 months. All but two beat the returns of the benchmark indexes that we use to grade our work.

Putting Press Release App To The Test

To help us efficiently analyze fourth quarter earnings releases and identify Information Arbitrage, we’ll be using MS Microcaps‘ new press release app, which allows us to scan for key reports much faster than before.  On my X feed, I demonstrated how the mobile version of the app, currently in its early stages, can efficiently navigate the releases via a quick scan which can be helped along by filters and keywords. Follow @PRaaPTeam for more updates and tutorials.

***Keep an eye out over the next few weeks for a potential Buy on Pullback #13. ***

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Using PRaaP Earnings Filter on Mobile

Key Step in Microcap Stock Research: Reading Press Releases

Uncovering Two Micro-Cap Multibaggers Through Press Release Research

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Earnings Standout

One earnings standout from last week was $FTGFF (FTG.TO), a Select Coverage Universe Model Portfolio holding. During Q4 2022, the company reported a 13% increase in quarterly revenue and a 60% rise in non-GAAP net income ($0.16 vs. $0.10), surpassing our expectations. So far, at a current gain of 52.40% (Canadian symbol FTG.TO is up 39.82%), the stock has performed well since being added to the portfolio. We’re hoping it can match—or exceed—the returns of another Select Coverage Universe Model Portfolio holding, $TATT, a company operating in the aerospace industry, which has gained 149% since being added.

~ Maj Soueidan, Co-founder, GeoInvesting

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The post Current Market Sentiment Could Provide the Perfect Storm for Launching Buy on Pullback Model Portfolio 13 During Earnings Season [GeoWire Weekly No. 175] appeared first on GeoInvesting.

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