HI Financial Services Mid-Week 07-22-2014
What’s the difference between bottom-line and top-line growth?
By Investopedia Staff A A A
More specifically, the bottom line is a company’s income after all expenseshave been deducted from revenues. These expenses include interest charges paid on loans, general and administrative costs and income taxes. A company’s bottom line can also be referred to as net earnings or net profits.
For example, a company would be experiencing top-line growth if a new advertising campaign caused a 15% increase in sales for its widgets, which resulted in an increase of $2 million to the revenue. Bottom-line growth would occur in a situation where a company found a new supplier for raw materials that results in a cost savings of $4 million.
Both these figures are useful in determining the financial strength of a company, but they are not interchangeable. Bottom line describes how efficient a company is with its spending and operating costs and how effectively it has been controlling total costs. Top line, on the other hand, only indicates how effective a company is at generating sales and does not take into consideration operating efficiencies which could have a dramatic impact on the bottom line.
However, this is not to say that a company cannot experience both top-line and bottom-line growth at the same time. This can be achieved if a company earns more revenue (top line) and reduces its operating costs (bottom line).
What has been happening so far this week?
Earnings season with many “bell-weather” stocks reporting. I can tell you non–directional and collars are the best way to play earnings. Geo-political tensions in Israel and Ukraine are being ignored.
Where will our market end this week?
This week I am not going to guess because it is all earnings driven and I’m not sure what the market is truly looking for. I know better than expected earnings on top-line will move the markets higher and guidance is very important for next quarter.
DJIA– Higher highs and higher lows within a bullish “pretty narrow” channel. Testing 17,000 as resistance last month and support this month. The DOW is acting just like it should right now.
COMP – higher lows but not higher highs. Triple Bottom at 4350
Where Will the SPX end July 2014?
I am standing by my monthly prediction of up 1% for the month.
We are still testing 17,000 so I am standing by my expectation on July 1st.
I think we are going to test the 2000 on the SPX and test 17,000 on the DJIA. We might be slightly higher but I would say a 1% up month.
My guess is 2000 on SPX, 17,100 on the DJIA and 4500 on the COMP
What is on tap for the rest of the week?=
Tues: MO, CROX, DFS, HOG, ISRG, KMB, LMT, MCD, KO, MSFT, BTU, VMW, AAPL
Wed: T, BA, DAL, FFIV, FCX, KNX, PEP, QCOM, RSF, CAKE, TRIP, WHR, FB
Thur: MMM, ALK, AMGN, CAB, UA, CAT, DPS, DNKN, GM, GRUB, HSY, IM, JBLU, NBL, RTN, QLEC, LUV, BIDU, F, SBUX, V,
Fri: SWK, XRX
Tues: CPI, Core CPI, FHFA Housing Price Index, Existing Home Sales
Thur: Initial Claims, Continuing Claims, New Home Sales
Fri: Durable Goods, Durable ex-trans
Tues – Jp: All Industry Index
Wed – FR: Business Climate, GB: BOE Minutes, EMU: EC Consumer Confidence Flash, JP: Merchandise Trade, PMI Manu, CN: PMI Flash Mfg Index
Thurs – EMU:FR:DE: PMI Composite
Friday – EMU: MS Money Supply
How I am looking to trade?
I am in Collar Trades and/or Protective Puts for earnings.
That means you need to build you earnings list
AAPL 7/22 AMC
BIDU 7/24 AMC
BBY 8/26 BMO
CLDX 8/6 AMC
D 7/30 BMO
DIS 8/5 AMC
F 7/24 BMO
FB 7/23 AMC
LNCO 8/7 BMO
MEI 8/28 est
MS 7/17 BMO
NVDA 8/7 est
SBUX 7/24 AMC
SNDK 7/16 AMC
SLB 7/17 AMC
TSLA 7/31 AMC
V 7/24 AMC
VZ 7/22 BMO
ZION 7/21 AMC
AAPL – I’m ready on AAPL but I can add some shares. Not sure if I want to do that before or after earnings.
BIDU – Already 100% plus return
DIS – Just sitting in shares and with the movie Frozen revenue, summer park revenue, I plan on protecting with OTM Long puts at maybe $85
V – Have OTM Aug 215 long puts to run thru earnings
F – Protecting profits and I’m not sure if they will have good earnings based on monthly channel check and auto reports
NVDA – Have previous earning puts still on that ecpire on Friday and Have Sept long puts in place for earnings
Blogsite down until Monday. GoDaddy stopped using blogspot so I am transferring everything to word press
www.myhurleyinvestment.com = Blogsite
Article Links can be followed by being a twitter follower
Money Managers Aren’t Ready for a Bear Market
Bubble Paranoia Setting In as S&P 500 Surge Stirs Angst
Why We’ll Be a Bit Distracted Until Monday Arrives: Opening Line
China’s debt soars to 250% of GDP