What is earnings season? Every quarter, publicly traded companies are required to file a report stating their sales and earnings as well as to provide a general business update. For lack of a better description, it is like a quarterly report card. Typically earnings season starts a few weeks after the completion of the calendar quarter and runs for approximately four weeks. At Winch Financial, the Investment Team is busy sifting through all of the various earnings reports and listening to management conference calls summarizing the business results of the first quarter of 2014 and analyzing the operating direction for the remainder of the year.
Earnings season is an important time in the Investment Department. It presents an opportunity to analyze the most recent financial statements of a company and get a key read of operating results and direction. For our stock and bond investments we want to make sure everything is on track with our forecasts. Earnings season also gives the Investment team the opportunity to evaluate trends in corporate America and reposition our holdings, if necessary, to capitalize on emerging trends. It also provides the Investment Team with the data it needs to develop new financial models and assess individual company valuations.
Just like a child’s school report card, an earnings report provides insight into a company’s strengths, weaknesses and opportunities. While it is still early in earnings season, our initial read shows companies handled the impacts of a harsh winter effectively.
Importantly, corporate America sounds confident a pick-up in economic activity in the developed markets will accelerate as the year progresses. The one worrisome trend is a general slowdown in activity in emerging markets. Overall, companies appear well positioned and confident on future business activity. Winch Financial remains optimistic the bull market for stocks is still intact and we are seeing clear signs of acceleration in economic conditions. Lastly, Winch Financial is expecting interest rates to start rising as the year progresses, given improved economic activity and the potential for a slight uptick in inflation as some sectors of the economy start regaining pricing power.
We combine a thorough analysis of corporate earnings reports with a keen understanding of each client’s retirement goals and risk/reward profile. The result is an investment team with a laser focus in you.