To allow everyone to invest in a public company, one of the most vital requirements from the market regulators is that each company should release their financial reports to the public to allow each individual or organization to evaluate the company’s financial health and situation to help investors to make a rich information to help deciding whether or not invest or keep their shares in this company.
Market regulators obligate publicly offered companies to release periodic financial statements and earnings reports every quarter or semi-annual and it differs from one market to another where investors can go over their financial data to determine how the company is performing and forecast their performance forward. This period is called “Earnings Season”
* When is Earnings Season ?
Earnings season commonly takes place two weeks after the end of each quarter and runs for about six weeks. a general timeline:
– Q1: Quarter ends March 31, earnings season begins in mid-April and ends in May.
– Q2: Quarter ends June 30; earnings season begins in mid-July and ends in August.
– Q3: Quarter ends Sept. 31; earnings season begins in mid-October and ends in November.
– Q4: Quarter ends Dec. 31; earnings season begins in mid-January and ends in February.
if the company didn’t submit their financial data, usually fines applied and in some cases trading pauses on this company until they submit their data.
* Why the Earnings Season is important ? Stock market is different from any other markets, it relies mainly on two main analysis Fundamental Analysis and Technical Analysis and both are two sides of the same coin.
Fundamental analysis answers your question about “Which” company to invest in, on the other hand technical analysis answers “When” should you invest
* What to expect in the Earnings Season ?
Volatility, If a company’s results beat or miss analysts’ expectations or surprises investors, then its stock may experience some wild price swings as analysts, ETFs, mutual funds and market advisors update their recommendations and holdings, some index providers may even change the company weight in the indices.
Throw back on May, 2022 JP Morgan announced an update on their global indices before starting Q2, some EGX companies experienced the effect of such updates as some companies are removed from JP Morgan’s small companies global index and others will be upgraded from small companies to medium companies index, these decision were based on the companies financial health and performances, the action took effect on the 31st of May 2022 through EGX’s closing auction session and here’s the results:
EFG Hermes (HRHO): inflow $36 Mil
E-Finance (EFIH): inflow $4.5 Mil
Fawry (FWRY): outflow $18 Mil
Palm Hills (PHDC): outflow $1.4 Mil
Heliopolis Housing (HELI): outflow $1.4 Mil as well
* What to do in Earnings Season ?
It’s time to revisit your fundamental analysis, re-evaluate the companies you are investing in revisit ratios like P/E, EPS, ROE, Debts To Assets, Debts to Equity, Debts to market price and review your position whether you are going to invest more in the company or close your position for poor performing companies.