Whisper Number: How Will Fastenal Investors React to Earnings?

Fastenal Co. (NASDAQ:FAST) is expected to report earnings on Friday. The whisper number is 45 cents, 1 cent ahead of the analysts’ estimate and showing some confidence from investors. Fastenal has a 30 percent positive surprise history (having topped the whisper in eight of the 27 earnings reports for which we have data).

Earnings history:

  • Beat whisper: 8 qtrs
  • Met whisper: 4 qtrs
  • Missed whisper: 15 qtrs

Our primary focus is on post earnings price movement. Knowing how likely a stock’s price will move following an earnings report can help you determine the best action to take (long or short). In other words, we analyze what happens when the company beats or misses the whisper number expectation.

The table below indicates the average post earnings price movement within a one and 30 trading day timeframe:

The strongest price movement of -5.3 percent comes within 30 trading days when the company reports earnings that beat the whisper number, and +10 percent within 30 trading days when the company reports earnings that miss the whisper number. Although the strongest price moves are opposite what would be expected, the overall average price move is “positive” (beat the whisper number and see strength, miss and see strength) when the company reports earnings.