Strategy of Moving Corporate Earnings Report Has Kept its Edge

The strategy whereby a company announces that it has moved up its earnings release date—which often boosts its stock price—has continued to be profitable, “even at a time where investment managers lament the crowding in popular trades, which can often render them obsolete.” This according to a recent article in The Wall Street Journal.

Barry Star, chief executive at corporate event data company Wall Street Horizon, says, “Here is a signal that is right in front of everybody’s face and still works.” According to data provided by Wall Street Horizon and quant software firm Deltix, the article says, the strategy of going long companies that move up their earnings release dates and going short those that push them back has “notched a return of more than 13% annually during the period between 2006 and 2017.” This beat the S&P 500’s 8.1% return over that period.

The article cites the example of TripAdvisor, which (according to Deltix data) first scheduled an earnings announcement for February 9th of this year but then pushed it back to February 15th. “The stock dropped 11% the next day,” the article said, “as investors digested the report.”