If you're trying to build your earnings season watchlist by looking for stocks setting up in a base ahead of their next quarterly report, here's one that fits the bill: Arch Capital. It's slated to release first quarter results the afternoon of April 27 and is currently about 4% shy of a 49.25 entry. The entry is based on a first-stage flat base. Arch Capital stock was up fractionally to 47.77 Wednesday afternoon.
Among the Bermuda-based insurance company's key ratings, it has an outstanding 93 EPS Rating of a best-possible 99. Arch Capital stock's 91 Composite Rating puts it in the top 9% for a group of the top five other IBD ratings. It also carries a strong 89 Relative Strength Rating. One caution flag — its D+ Accumulation/Distribution Rating indicates slightly more selling than buying of its shares by mutual funds and other big investors.
Arch Capital Stock Doubled Since Covid Low
In its most recently reported quarter Arch Capital reported a 127% leap in earnings to $1.27 per share. It posted EPS growth of 28%, 99% and 155% the prior three quarters. Sales last quarter dipped 3% to $2.31 billion.
Analysts expect earnings growth of 81% for the first quarter, and 24% growth for the full year. Annual growth estimates were recently revised lower.
Arch Capital stock dipped to a Covid market intraday low 20.93 in late May 2020 and has more than doubled its price through Wednesday.
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Arch Capital stock earns the No. 10 rank among its peers in the Insurance-Property/Casualty/Title industry group. Alleghany, Kinsale Capital and W.R. Berkley are among the top 5 highly rated stocks within the group.
Understand that buying a stock just ahead of earnings involves risk since you typically don't have enough time to build a profit cushion before the latest quarterly numbers come out. Be sure to follow sound buy and sell rules to minimize your exposure.
Note: Dates for earnings reports are subject to change. Check the company's website for any updates.
