Earnings season is full of problems for investors. If a company doesn’t meet analysts’ expectations, you can expect its stock to fall. But there’s another concern… one most investors don’t pay attention to. What should you do if a company you’re watching does beat estimates? Should you take that as a sign to buy? Some traders might suggest you do just that. But for anyone looking for a long-term investment, an earnings “beat” could be the exact wrong time to get in. Take Fitbit Inc. (NYSE: FIT), for instance. Fitbit is one of the hottest stocks of the year. The… Read More
Earnings season is full of problems for investors. If a company doesn’t meet analysts’ expectations, you can expect its stock to fall. But there’s another concern… one most investors don’t pay attention to. What should you do if a company you’re watching does beat estimates? Should you take that as a sign to buy? Some traders might suggest you do just that. But for anyone looking for a long-term investment, an earnings “beat” could be the exact wrong time to get in. Take Fitbit Inc. (NYSE: FIT), for instance. Fitbit is one of the hottest stocks of the year. The maker of active, wearable tech launched its IPO this summer at around $30 and almost immediately spiked to $50. Yesterday, after the closing bell, the company announced its third-quarter earnings. It raked in 19 cents per share in earnings compared to the Street’s average estimate of 10 cents per share. Many investors saw those results and bought. Those investors might already be sitting on a loss. The stock fell 8.55% on November 3. You see, along with better-than-expected earnings, the company also announced that it was going to sell additional shares on the open market. In other words, shareholders that… Read More