Trading Places with Tom Bowley

Align Technology (ALGN) Absolutely Crushes Revenue And EPS Estimates!

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'Tis the season to look for blowout earnings reports and Align Technology (ALGN) delivered one last night. Wow! Check out ALGN's actual revenues and EPS vs. Wall Street consensus estimates:

Revenues: $734.1 million (actual) vs. $531.9 million (estimate)

EPS: $2.25 (actual) vs. $.59 (estimate)

Now THAT is an earnings beat! The best part is that Wall Street is rewarding the company in pre-market action. Here's the quote with an hour left to the market open:

Companies like ALGN are the types of leaders that we look for when we announce our 10 equal-weighted stocks to go into our four portfolios at EarningsBeats.com. Sticking with leading stocks in leading industry groups is how you outperform the S&P 500. Here are our portfolio returns since inception and during the most recent "EarningsBeats.com quarter" (which runs from August 19th to November 19th):

The timing of our quarters is related to earnings season. When we select our next 10 stocks for each portfolio on November 19th (just four weeks from today!), nearly every company will have reported its latest quarterly results. Because of ALGN's blowout report, there's a fairly decent chance it'll make one of our portfolios. Check out ALGN's chart:

The bottom panel shows that medical supplies companies ($DJUSMS), in general, have been outperforming the S&P 500 by a considerable amount lately. It never hurts to be in an industry group that is seeing money rotate into it. Then throw in those incredible quarterly numbers and it's easy to see why Wall Street is responding the way it is this morning.

On Tuesday, I hosted a "Q3 Earnings" webinar for our EarningsBeats.com members and provided them a ChartList that highlighted companies that I believe will post excellent results over the next week (through Wednesday, October 28th). I also included those companies that I believe are more likely to disappoint. ALGN was included as one of our strong companies where I was looking for a stellar report. There were 115 companies in this ChartList and you're welcome to review this list (you can download it into your StockCharts.com account if you're an Extra or Pro member) - even as a fully-refundable $7 30-day trial member. CLICK HERE to join us at EarningsBeats.com.

Also, in our Friday EB Digest (free newsletter), I plan to discuss one upcoming earnings report where I'll be looking for another blowout. You can SUBSCRIBE HERE to EB Digest at no cost. There is no credit card required and you can unsubscribe at any time.

Happy trading!

Tom

Tom Bowley
About the author: is the Chief Market Strategist of EarningsBeats.com, a company providing a research and educational platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR), providing guidance to EB.com members every day that the stock market is open. Tom has contributed technical expertise here at StockCharts.com since 2006 and has a fundamental background in public accounting as well, blending a unique skill set to approach the U.S. stock market. Learn More
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