An Amazing Mind for Numbers
When I first saw Matt Weinschenk I thought he was part of a class trip that was visiting our offices. That’s how young he looked.
Turns out my good friend and associate Louis Basenese had hired him to work as a market researcher after he came highly recommended from a trusted friend over at The Oxford Club.
Right from the start, everything Matt did for us was top notch. He was consistently turning up some of the most exciting (and potentially profitable) research our organization had ever seen. He had a great mind for numbers and detail. Although he didn’t say much, he was clearly focused and bright… and I won’t soon forget one of the first conversations I had with him.
He was telling me about some research he’d been doing on his own since his senior year at college, shortly before he’d switched from biochemistry to economics once he realized his true passion lay in the markets, not Petri dishes.
It was about how certain stocks react within a pre-subscribed timeframe when, among other things, a company releases an earnings announcement that beats analysts’ expectations by a substantial amount.
Very intriguing stuff…
Then he pulled out the numbers: Sheets and sheets of back-testing he’d done… companies he’d followed… and how stocks that currently fit his finely tuned criteria were doing.
“Chills…”
That’s when I got chills…
Literally hundreds of stocks that shot up 45%, 80%, 125%, 300% in the days and weeks following an earnings surprise…
So, so many of them… like when Pilgrim’s Pride, the frozen food company, beat earnings estimates by some 280%… and the stock soared 309% over the next three months…
- Or when garment-maker Quicksilver beat Wall Street estimates by 14 times – and the stock shot up 172%…
- Or when another apparel company, Pac Sun, beat estimates by 89%… and the stock shot up 139%.
- Or when Pier One Imports’ earnings beat estimates by 97% – and the stock rocketed 276% over the next 90 days.
- Or when Fuel System Solutions more than doubled in price when earnings exceeded estimates by more than 120%…
- Or when Force Protection went on a 123% run after both earnings and revenue exceeded estimates by a long shot…
- Or when clothier True Religion delivered 157% gains after surprising both on the earnings and revenue side…
- Or when commercial real estate company HFF Inc. reported a 100% earnings surprise in the midst of the real estate crisis and went on to 144% gains over the next 90 days – and a 488% gain over the course of a year…
- Or when China Financial – the Chinese internet information provider – beat earnings estimates by about 45%… and the stock shot up 138%…
- Or Map Pharmaceuticals, which beat earnings estimates by a mere 11% – and went on to post staggering 497% gains over the next 90 days…
And that’s just a taste…
The listing Matt showed me had over 770 companies he’d been watching and analyzing since mid 2007… one company after another where stock prices “drifted” higher over the 90 days following an earnings surprise.
Although the term “drift” may be a misnomer…
In many cases it’s an out-and-out rocket ride to extraordinary wealth.
Just look at the gains Casual Male Retail Group could have generated for you had you owned the stock when the company blew away earnings estimates in March of 2009:
Just a few days after Casual Male’s earnings announcement, you could have bought 10,000 shares for about $4,800. By June 5, that investment could have ballooned to $25,000.
