To The Moon

As of 16 May 2023, most of the S&P500 companies have announced their earnings. I have reached out to Google Bard to provide a summary. In fact, 77.1% of the companies have beaten revenue and EPS estimates compared to an average of 73.5% for the past 4 quarters and 66.3% for the long-term average. Have you heard of Estimate Management? earnings & estimates of Apple from investing Let us use Apple as an example. For the latest earnings (period ending 03/2023) release dated 04 May 2023, the forecast is 1.43 and 92.9B for its EPS and revenue respectively. Apple has beaten EPS & revenue estimates with actual results of 1.52 and 94.8B for EPS & revenue respectively. Let us look at the previous quarter (period ending 12/2022), the forecasts of EPS & Revenue are 1.94 & 121.88B respectively. If we are to compare the earnings (between the last 2 quarters), we can note a significant drop in the forecast for both EPS and revenue. This can be easily explained because the new iPhones were launched in the last quarter of the calendar year (that is Oct to Dec or Q4). Thus, it is not reasonable to compare these 2 quarters. Instead, let us look at the same quarter from a year ago (period ending 03/2022), the estimates for EPS & Revenue were 1.42 & 94.03B respectively. Comparing the forecast of the 2 periods (03/2022 versus 03/2023 ~ same quarter, one year later), there is an 0.01 increase in EPS and a drop in revenue estimate by 1.13B. If we compare the actual results between 03/2022 & 03/2023, this is what we have: EPS is the same at 1.52 (for both 03/2022 & 03/2023) Revenue fell from 97.28B (03/2022) to 94.8B (03/2023) This does not take away that Apple has a good earnings season with a good net profit of $24.16B from the last quarter ending 03/2023. The companies can lower the forecast or estimate to achieve an estimate beat. From my research using Google Bard, we note that As of May 16, 2023, the estimate for both revenue and EPS have been lowered by 1.6% and 0.7%, respectively, compared to the previous quarter Q4/2022 for the S&P 500 companies. Google Bard has also summarized the top & bottom 3 sectors: Top 3 sectors Energy Materials Financials Bottom 3 sectors Communication Services Real Estate Consumer Discretionary Now that we understand estimate management can be used to direct a narrative about the earnings, let us be motivated to research the businesses that we plan to invest in. In closing, I am glad that Google Bard has helped with much of the content research (seen in the section below). It is important that we continue to qualify the businesses we invest in. I do not believe that every business will last forever. Once their financials & business fundamentals are raising perpetual concerns, let us be firm to cash out our profits/stop loss or risk losing most of them.

S&P500 companies earnings The Energy, Materials, and Financials sectors have the highest percentage of companies beating revenue and EPS estimates, with 87.1%, 86.0%, and 85.7%, respectively. The Communication Services, Real Estate, and Utility sectors have the lowest percentage of companies beating revenue and EPS estimates, with 60.0%, 64.0%, and 70.0%, respectively. The outperformance of the Energy, Materials, and Financials sectors is due to rising commodity prices and strong economic growth. The underperformance of the Communication Services, Real Estate, and Utilities sectors is due to rising inflation and slowing economic growth. Top & bottom 3 sectors (S&P500) Here is a summary of the top 3 and bottom 3 sectors of S&P 500 based on the latest Q1/2023 earnings: Top 3 sectors Energy, Materials & Financials Bottom 3 sectors Communication Services, Real Estate & Consumer Discretionary The top 3 sectors of S&P 500 based on the latest Q1/2023 earnings are Energy, Materials, and Financials. These sectors have all benefited from rising commodity prices and strong economic growth. The bottom 3 sectors of S&P 500 based on the latest Q1/2023 earnings are Communication Services, Real Estate, and Consumer Discretionary. These sectors have all been hurt by rising inflation and slowing economic growth. Here is a more detailed look at each sector: Energy The Energy sector has been the best-performing sector of the S&P 500 in Q1/2023, with an increase of 37.5%. This is due to rising oil and gas prices, which have been driven by the war in Ukraine and sanctions on Russia. Materials The Materials sector has also performed well in Q1/2023, with an increase of 28.8%. This is due to rising prices for metals and other commodities, which have been driven by strong demand and supply chain disruptions. Financials The Financials sector has also performed well in Q1/2023, with an increase of 19.5%. This is due to rising interest rates, which have boosted the profitability of banks and other financial institutions. Communication Services The Communication Services sector has been the worst-performing sector of the S&P 500 in Q1/2023, with a decrease of 10.3%. This is due to rising inflation and slowing economic growth, which have hurt advertising and other revenue streams for companies in this sector. Real Estate The Real Estate sector has also performed poorly in Q1/2023, with a decrease of 8.8%. This is due to rising interest rates, which have made it more expensive for people to buy homes and other real estate. Consumer Discretionary The Consumer Discretionary sector has also performed poorly in Q1/2023, with a decrease of 7.9%. This is due to rising inflation and slowing economic growth, which have hurt spending on discretionary items such as clothes, electronics, and travel. It is important to note that past performance is not a guarantee of future results. Investors should always do their own research before investing in any sector. Change in the estimate of both revenue & EPS As of May 16, 2023, the estimate for both revenue and EPS have been lowered by 1.6% and 0.7%, respectively, compared to the previous quarter Q4/2022 for the S&P 500 companies. This is due to a number of factors, including rising inflation, slowing economic growth, and the ongoing war in Ukraine. The Energy sector has seen the largest decrease in revenue and EPS estimates, with a decrease of 4.5% and 2.2%, respectively. The Materials sector has also seen a significant decrease in revenue and EPS estimates, with a decrease of 3.5% and 1.8%, respectively. The Financials sector has seen a smaller decrease in revenue and EPS estimates, with a decrease of 1.5% and 0.5%, respectively. The Communication Services, Real Estate, and Utilities sectors have seen the smallest decrease in revenue and EPS estimates, with a decrease of 0.5%, 0.3%, and 0.2%, respectively. @TigerStars $Apple(AAPL)$ $S&P 500(.SPX)$