Earnings Season Curse on High-Priced Stocks? (IBM, AAPL, ISRG, VMW, NFLX, AMZN, BIDU, GOOG, PCLN, GS, EMC, INTC)

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There is an interesting theme that has been worth looking deeper into so far this earnings season.  High-priced stocks that have seen significant runs higher have a bias against the stocks after the earnings report so far.  Maybe this is just profit taking and a sell-the-news mentality after guidance seems to be mostly in-line with expectations.  We have seen this occur in both International Business Machines Corp. (NYSE: IBM) and Apple Inc. (NASDAQ: AAPL), as well as Intuitive Surgical, Inc. (NASDAQ: ISRG) and in VMware Inc. (NYSE: VMW).  With earnings coming up from Netflix Inc. (NASDAQ: NFLX), Amazon.com Inc. (NASDAQ: AMZN), and Baidu, Inc. (NASDAQ: BIDU), we wanted to see what the prospects and risks for these companies are going into earnings.  Google Inc. (NASDAQ: GOOG) has so  far managed to dodge bullets here in this ‘earnings curse on high-priced stocks’ this earnings season.

Longer-term, that also leaves Priceline.com Incorporated (NASDAQ: PCLN) to ponder ahead of its earnings in a couple of weeks.  We have compiled the event and the related move as well as provided some expectations and added color on those companies on deck to report earnings this week.

International Business Machines Corp. (NYSE: IBM) and Apple Inc. (NASDAQ: AAPL) both had significant runs higher into earnings as both had traded at all-time highs.  We don’t need to bother with regurgitated news and earnings recaps again, but Apple’s drop was margin concerns and some mixed product sales and IBM’s was simply on guidance being mostly in-line.  The sell-off in IBM was not a surprise and the only surprise so far in Apple is that shares keep trying to recover and get back above the pre-earnings levels.

Getting away from technology, what about Intuitive Surgical, Inc. (NASDAQ: ISRG)?  The company beat earnings but da Vinci surgical systems sales appear short.  Shares are down over 7% so far on Wednesday at $258.25.  What is interesting is that the run here has been very muted compared to other big stocks during the September to October market surge.  Shares were under $270 at the lows of summer and shares rose to above $300 before pulling back in September.  With the drop being a surprise here, perhaps that is only more evidence that this earnings season may have a hex on high-priced stocks.

Google Inc. (NASDAQ: GOOG) was the one standout because it blew away numbers at a time when it was not expected to do so.  The shares had gone from $440 in the summer lows to $540, but the big pop was just because the field wasn’t expecting blowouts like what came from the company.  Google shares are now above $610.00.