IAS: Looking back at last Quarter’s Earnings season
The 3rd quarter of 2017 just finished. With it brings a close to Q2 earnings season. And we promised to always update how our equity picks did on their earnings announcement dates!
Our Internet Advantage Strategy (IAS) is all about finding hidden revenue trends inside of companies we might invest in. So, when we hold a stock leading up to or in to its earnings results, we basically believe it will be surprising on earnings.
It is like getting a report card every quarter on how well we are finding these hidden revenue trends.
The results this quarter: We continue to find more surprises than the overall stock population tends to produce. Our Long portfolio found revenue surprises on over 86% of earnings results. That result is the highest ever result for any quarter in our history and it is the 4th consecutive quarter over 80%.
For Earnings surprises, we were over 80% for the 5th consecutive quarter. The chart below shows the change over time for finding companies that beat on BOTH the Revenue expectation and the EPS expectation.
As we have always said, don’t just look at our returns to evaluate how well we are doing. Look at our earnings results also. It is the best report card for whether our strategy is achieving the results we designed it to achieve.