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falling-stocks-380x285-300x225Third quarter earnings season is well under way and one thing is certain: Many companies are in dire straits.

For the most part the numbers have been at best poor. Some would say abysmal. Bottom line profits might be meeting expectation, but revenues are coming up short.

For a forward looking market nothing could be worse. If sales are less than expected, there is only one way to keep profits high – cut expenses or raise prices.

Neither of those options is healthy in the long term, unless you a monopoly that can name your own price without impacting demand. Nope, the decline in revenues is a warning sign that should be heeded by any investor or trader.

For Earnings Players the clues in the early part of earnings reporting season provide a clear path to companies seeing profit destruction. That profit destruction ultimately leads to valuation destruction.

For traders anticipating that destruction, the profit potential is very real and very significant. In the case of companies likely missing earnings or revenue estimates, the best way to exploit such an event is with put options.

Earnings Players, buy those options right before the company reports and then after the news is released and the market over-reacts as it usually does the trade is closed. Triple digit gains are not uncommon.

What is needed then is to identify the companies that are headed for disaster.

3 BIG WINNERS in LESS THAN 7 HOURS! Last week we bagged 3 winners in less than 7 hours of trading… Krispy Kreme (KKD) CRUSHED EARNINGS ESTIMATES, share prices soared and our call options were up MORE THAN 200%. Hewlett Packard (HPQ) MISSED EARNINGS ESTIMATES, our put options JUMPED 200% AT THE OPEN! Best Buy (BBY) MISSED EARNINGS BADLY, shares finished down, and we closed out a 54% GAIN. Don’t miss out on you chance bank 100% to 200% winners with this Week’s Earnings Trades.  Sign-up Now.

Here are 5 companies reporting results in December that are likely to be the biggest losers:

 

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