If you let this stock market carnage distract you from earnings season, you could miss out on fast returns that most don’t even think are possible right now—yet they’re easily within reach.
Talk about a bloodbath. The market is off to one heck of a start for the new year.
Some select losers, like Fitbit (NYSE:FIT), are being severely punished by the bears.
The fitness wearable company lost a third of its value in less than 2 weeks of trading in the young year.
On what basis?
Never mind that Fitbit was likely a bright, shining star during the holiday season. What mattered more was a new product announcement at the Consumer Electronic Show for something Fitbit calls Blaze.
Blaze, it turns out, is a souped-up wearable that has more features than the basic Fitbit device…
That sounds like a wise strategy and evolution of the product, but not so much to the irrationally inclined sellers in the market.
Instead of comforting the longs, the Blaze announcement merely reminded market participants of the ever-looming threats to Fitbit’s business model—mainly competition from Apple (NASDAQ:AAPL).
Such nonsensical speculation and fear is the sort of thing that Earnings Players can exploit in a big way.
The 30%+ loss in Fitbit shares comes on top of an already steep 25% drop in share price since November. I’ve seen inefficiency in the market before, but not like this.
Bottom line: shares of Fitbit trading at their IPO price in advance of earnings is an absolute gift.
Here, we have one of the few companies able to grow profits in this economy being ambushed by short sellers, and its operating results will turn the tide.
In the first two quarters of Fitbit’s existence as a publicly traded company, results crushed expectations. By all accounts, the next report will do the same.
As for Blaze, fear not—the market overestimated the threat from Apple.
The new device is reminiscent of the original Blackberry that offered remote access to email, and the market doesn’t need a wearable device with all the features Apple brings. We already have that on phones that tuck away neatly into our pockets.
What’s cool about Blaze: the minimalist features that turbocharge the basic fitness tracking of the original Fitbit device. Those wouldn’t be as exciting tucked away in our pockets.
When the rest of the market figures that out, combined with a powerful earnings result, watch out.
You could be looking at the monster earnings trade of the decade!