Shaw Group - Exactly Why I Don't Play the 'Earnings Game'
The favorite game on Wall Street seems to be "the earnings game" - aka pure gambling. Roll heavily into a stock ahead of earnings, roll the dice, and hope it comes up your way.
Shaw Group (SGR) - one of the Obama infrastructure stocks - had
earnings yesterday and put on a huge gain off of earnings that were non too impressive. But... they pumped up their prospects of getting US taxdollars from New Deal 2.0 and the Street loved it. It's so very random, but this is the casino we play in.
Shaw has a quite spotty history of hitting its quarterly numbers, but when President Midas has your back, none of it really matters. (
Jul 10: Shaw Group - Solid, not Spectacular) (
Apr 9: Shaw Group Misses Its Numbers) But to show just how bad these stocks have been hit, we sold our position (
May 13: Closing Shaw Group) in May in the low $50s, and after yesterday's gain (which added a quarter of value in 1 session) the stock is still in the mid to upper $20s.
- Shaw Group Inc. posted a loss Thursday for its first quarter as the Japanese yen strengthened against the U.S. dollar, eroding the engineering and construction company's returns on its stake in nuclear power plant builder Westinghouse. Excluding the Westinghouse results, however, Shaw's adjusted profit beat analyst estimates. (I love that sort of accounting; well if you exclude 1/4th of our business - we made money!) The Shaw Group holds a 20 percent stake in Westinghouse Electric Co., the majority of which is owned by Japan's Toshiba Corp.
- For the three months ended Nov. 30, the company lost $39.9 million, or 48 cents per share, compared with profit in the year-earlier period of $2.2 million, or 3 cents per share.
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