Sanmina Beats Analyst Estimates on EPS

Sanmina (Nasdaq: SANM  ) reported earnings on April 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 30 (Q2), Sanmina met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly. Non-GAAP earnings per share grew. GAAP earnings per share grew.

Gross margins contracted, operating margins dropped, net margins expanded.

Revenue details
Sanmina booked revenue of $1.43 billion. The seven analysts polled by S&P Capital IQ expected sales of $1.42 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.30. The seven earnings estimates compiled by S&P Capital IQ forecast $0.29 per share. Non-GAAP EPS of $0.30 for Q2 were 11% higher than the prior-year quarter's $0.27 per share. GAAP EPS were $0.25 for Q2 compared to -$0.02 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 7.0%, 30 basis points worse than the prior-year quarter. Operating margin was 2.4%, 10 basis points worse than the prior-year quarter. Net margin was 1.5%, 160 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.47 billion. On the bottom line, the average EPS estimate is $0.35.

Next year's average estimate for revenue is $5.91 billion. The average EPS estimate is $1.34.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 130 members out of 157 rating the stock outperform, and 27 members rating it underperform. Among 50 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 42 give Sanmina a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sanmina is outperform, with an average price target of $11.14.

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Why Comcast Called Out Netflix 283 Times to the Feds

Andrew Harrer/Bloomberg/Getty Images Comcast CEO Brian Roberts There's no love lost between Comcast (CMCSK) and Netflix (NFLX). The country's largest cable television provider and the world's most successful premium streaming company have been taking shots at each other in recent months, and the bad blood is spilling over into an SEC filing. Comcast mentioned Netflix 283 times in last week's 321-page filing with the Securities and Exchange Commission, defending its proposed acquisition of Time Warner Cable (TWC). It's odd to see a single company mentioned that often. Three words more important to Comcast's proposal -- "competition," "monopoly" and "antitrust" -- combined aren't mentioned as often. Battle of the Brands Netflix CEO Reed Hastings isn't afraid to make enemies. It's actually an essential trait when you're trying to be a disruptor. Offering a stand-alone streaming service that doesn't require a hefty cable or satellite television package is going to draw its fair share of critics, and Netflix hasn't had a problem calling out traditional platforms in the past. Most media reports play up that Comcast and Time Warner Cable combine for 33 percent of the country's pay-TV market, but they also combine for a 36 percent chunk of the broadband market. This is a big deal for Netflix since cord-cutters kissing their fat cable bills goodbye often continue to rely on these companies for the connectivity to stream Netflix's growing catalog. In a brilliant move nearly two years ago, Netflix began to publish monthly connectivity speeds of the country's leading Internet providers. As speeds for Comcast customers declined sharply through 2013, Netflix could rightfully argue that the cable-TV giant was trying to make its streaming service less attractive to Comcast customers. It worked. Netflix and Comcast agreed on a deal to improve the Netflix experience for Comcast's Xfinity customers, but it didn't come cheap. Speeds may have improved since bottoming out late last year, but Netflix doesn't want to see Comcast become even more powerful. Let's Make a Deal Comcast and Time Warner Cable are shrinking in the realm of pay TV. Comcast closed out 2013 with 305,000 fewer video customers than it had when the year began, and the smaller Time Warner Cable suffered a more brutal 833,000 in net defections. That's a total decrease of 1.138 million pay-TV customers. Many moved over to satellite television, AT&T's (T) U-verse and Verizon's (VZ) FiOS, but many others decided that enough was enough. Industry tracker SNL Kagan reported that pay-TV customers fell by 251,000 in 2013. This isn't a fluke. Comcast has experienced sequential declines of video customers in 27 of the past 29 quarters. As Comcast and Time Warner Cable fade, Netflix's popularity is growing. It topped 50 million global subscribers at the end of June, and it was expecting to close in on 54 million by the end of September. This is also probably a big reason for Comcast calling out Netflix. After all, it may be true that the combination of Comcast and Time Warner Cable will create a behemoth in cable television, but even the 33.5 million combined video customers at the two companies when the year began is no match for Netflix's reach worldwide. There are plenty of companies beyond Netflix that have voiced their concerns about a Comcast-Time Warner Cable pairing. It won't be an easy deal for the pay-TV giant to push through. The drama merely makes the entertainment nuptials just that much more entertaining. More from Rick Aristotle Munarriz
•It Would Be Real Magic If Disney Bought Nike's FuelBand •PC Sales Rise, Notably for Apple and Google •Can Trick-or-Treaters Save SeaWorld?

Evening Wrap: Amex Up, Tyson Down

Getty Images Actress Tia Carrere and the El Pollo Loco chicken.

It was a down day for indexes, but there were plenty of bright spots among individual stocks Tuesday.

The Dow Jones Industrial Average fell 70.48 points or 0.42% today to 16,912.11. The NASDAQ Composite Index declined 2.21 points or 0.05% to 4,442.70. And the Standard & Poor’s 500 Index dropped 8.96 points or 0.45% to 1,969.95.

Shares of American Express (AXP) rallied after the bell; the credit giant reported earnings that beat analyst expectations. American Express said it earned $1.43 per share in the second quarter, better than the $1.38 consensus expectation. Quarterly net income rose 9%  and shares outstanding fell 4% year over year. Revenue of $8.65 billion was slightly below the $8.66 billion expectation, according to Thomson I/B/E/S.

Shares of Tyson Foods (TSN) fell 3.4% on Tuesday, a day after Tyson said it would sell Mexican and Brazilian poultry businesses to JBS’s Pilgrim’s Pride. The resulting $575 million in proceeds would be used to pay down debt from Tyson’s pending $7.7 billion purchase of Hillshire Brands.

In related news, fowl is fair fare: El Pollo Loco (LOCO) shares fell 13% and continued their descent in the aftermarket. Shares of El Pollo Loco, a quick-serve restaurant concept based in California, soared 56% in its public offering Friday. The craziness prompted MarketWatch to post ratings for fast-food joints, with investors in mind.

Global oil exploration and refining company BP (BP) slid more than 3% after the U.S. and Europe agreed to step up sanctions on Russian energy, defense and banking enterprises. BP has a nearly 20% stake in Russia’s state-controlled energy company Rosneft.

One of the day’s biggest movers was Windstream Holdings (WIN), which surged more than 20% before settling up 12% Tuesday after the high-yielding telecom company said it would spin off assets into a real estate investment trust (covered on our income blog). The REIT news carried other telecom names higher:  local phone companies CenturyLink (CTL) and Frontier Communications (FTR), shot up 5.8% and 14.3% respectively. And telecom giants got a lift too: Verizon Communications (VZ) rose 0.76%, while AT&T (T) climbed 2.6%.  Telecom exchange-traded funds also rallied on the REIT news.

Don't Worry: Dow 17,000 Isn't Out of Reach

The Dow Jones Industrials (DJINDICES: ^DJI  ) closed up almost 42 points on Friday, limiting the Dow's losses for the week to about 150 points. Yet, what's surprising about the stock market is how quickly investors have become pessimistic, with two straight triple-digit declines for the Dow making many people think that a correction is imminent, even though the two-day drop barely added up to 1%. By contrast, the Dow remains just 225 points below the 17,000 mark, and all it would take is a minor push forward for the stock market to eclipse that level and potentially send investors into a bullish frenzy all over again. Let's take a look at the inflection point that investors face right now.

Source: Wikimedia Commons. Courtesy Walters Art Museum.

The bull-bear tug of war
In past bull markets, the Dow Jones Industrials followed a relatively similar pattern. In the early stages of an emerging bull market, most ordinary investors were still shell-shocked from losses they had suffered during the preceding bear market. As a result, they were typically slow to get back into the market, often missing out on a huge share of the initial run-up in the Dow. Eventually, performance-chasing mainstream investors regained confidence in the market's ability to produce solid returns, and they therefore invested in the market. In some cases, the wholesale adoption of stock market investing by even novice investors provided a contrarian indicator for more sophisticated investors to back out of their stock positions, leaving the market vulnerable to a further pullback.

This time around, though, there's a new dynamic that's changing the supply-and-demand equation for stocks. During the financial crisis, even the largest companies suffered from liquidity problems. Goldman Sachs (NYSE: GS  ) , General Electric (NYSE: GE  ) , and Bank of America (NYSE: BAC  ) were just a few of the major companies that went to extraordinary lengths to get the financing they needed, tapping both private-sector funds and government sources provided by bailout legislation. That experience taught companies the value of cash, and in the ensuing recovery, cash has reigned as king, once again.

But as the economy has improved, many companies have too much cash, and they've been looking for ways to deploy it. One of the most common methods has been stock repurchase programs, which, in many cases, have reduced outstanding share counts of popular stocks, and left investors chasing fewer available shares. As it happens, company buybacks also have a checkered history of being ill-timed, as they usually come when businesses are flush with cash and, therefore, when stock prices are especially high.

The major question is whether individual investors will side with corporate buybacks or with institutional investors, which have been the primary owners of the shares that companies have bought back. If the Dow Jones Industrials and the broader stock market start to fall in earnest, then institutions could redouble their efforts, and eventually woo individuals to the bearish cause. But if the Dow keeps rising, underperforming institutional investors will feel even more pressure to get back into the market to avoid missing out even further -- and potentially feed a bull market to Dow 17,000 and beyond.

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PLUG – Plug Power Stock a Sell Even on Good Earnings

Popular Posts: The Top 10 S&P 500 Dividend Stocks for May5 Stocks to Buy in MayTwitter Stock Gets Third Upgrade in Three Days … And Still Isn’t a Good Buy Recent Posts: PLUG – Plug Power Stock a Sell Even on Good Earnings Weak Retail Sales Hurt Everything from Home Depot to Nike The Top 10 S&P 500 Dividend Stocks for May View All Posts

Anyone who follows Plug Power (PLUG) won’t be surprised that PLUG stock managed to fall nearly 10% right after Wednesday’s opening bell. Wild swings are what Plug Power is known for, and there are sure to be many more — probably to the downside — ahead.

There are always a few stocks that a portion of the market falls head-over-heels in love with, despite investors’ better judgment. Take look at what PLUG stock has done over the last 12 months, and it’s abundantly clear some players are blinded by their ardor.

True, Plug Power is one of the few ways for investors to bet on the exciting and revolutionary technology of electricity-generating fuel cells. But since when does it make sense for shares in a company that helps power fork lifts to rise more than 1,400% in a year?

Just as worrisome is the epic volatility seen in Plug Power stock. Indeed, PLUG stock has traded in a range of 22 cents to $11.72 in the last year alone. Sure, Plug Power stock still is up more than 140% for the year-to-date, but it’s also off 64% since its March 10 high. Have a look at the chart:

How does anyone figure an entry and exit point in a stock like that — especially one as neurotic as Plug Power stock?

Plug Power Stock Short Circuits on Earnings

The latest sell0ff in PLUG was set in motion by disappointing quarterly earnings. Plug Power reported a wider net loss year-over-year, to $75.9 million, or 57 cents a share, from $8.6 million, or 18 cents, in 2013. Yes, much of that stemmed from a charge of $68.4 million for stock warrants, but even on an adjusted basis, PLUG missed analysts’ estimate. Plug Power had an adjusted loss of 6 cents when Wall Street was looking for a loss of 5 cents.

Then again, missing by a penny a share is hardly a tragedy. Furthermore, although revenue declined to $5.6 million from $6.4 million, the top line comfortably exceeded Street estimates. That might be a disappointing quarter for PLUG, but it wasn’t so bad that the stock needed to be shellacked.

However, PLUG took a bad beating because that’s what happens to momentum stocks with insanely high valuations when anything negative comes to light.

Even after Wednesday’s selloff, Plug Power stock was luxuriously expensive, with a nosebleed forward price-to-earnings ratio (P/E) of 77. For comparison, the S&P 500 trades at 16 times forward earnings. Heck, even Netflix (NFLX) — a poster child for pricey momentum stocks — has a P/E of just 50.

That’s not to say that PLUG doesn’t have a solid business or a great future. It very well may. Walmart (WMT), the world’s largest retailer, uses fuel-cell-powered forklifts aided by Plug Power’s systems.

At an investor conference this week, PLUG said it will deliver more than 3,000 units this year and will end 2014 with a profit, excluding interest, taxes and depreciation. That’s nothing but good news for PLUG.

It does not, however, make Plug Power stock a buy.

Like fellow fuel-cell stocks Ballard Power Systems (BLDP) and FuelCell Energy (FCEL), PLUG stock trades wildly from headline to headline. The volatility alone makes Plug Power too risky because it’s far too easy to buy high.

If anything, Plug Power stock is a sell if you’re sitting on gains. Momentum stocks don’t stand a chance in this market, especially if they carry a 1,400% gain over the last year.

PLUG stock offers too many reasons to get out, and there looks to be plenty more selling ahead.

That’s why it’s time to pull the plug.

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.

U.S. Economic Growth Slows to a Crawl in First Quarter

Tony Dejak/AP WASHINGTON -- The U.S. economy barely grew in the first quarter as exports tumbled and businesses accumulated stocks at the slowest pace in nearly a year, but activity already appears to be bouncing back. Gross domestic product expanded at a 0.1 percent annual rate, the slowest since the fourth quarter of 2012, the Commerce Department said Wednesday. That was a sharp pullback from the fourth quarter's 2.6 percent pace and was worse than economists' expectations for a slowdown to a 1.2 percent rate. The slowdown partly reflected an unusually cold and disruptive winter, marked by declines in sectors ranging from business spending to home building. The Commerce Department's first snapshot of first-quarter growth was released just hours before the Federal Reserve wraps up a two-day policy meeting. While harsh weather partially explains the weakness in growth, the magnitude of the slowdown could complicate the U.S. central bank's message as it sets to announce a further reduction in the amount of money it is pumping into the economy through monthly bond purchases. U.S. stock index futures fell slightly on the report, while U.S. Treasury debt prices trimmed losses. The first-quarter stall in growth, however, is likely to be temporary and recent data have suggested strength at the tail end of the quarter. Separately, the ADP National Employment Report showed private employers added 220,000 jobs to their payrolls in April after increasing headcount by 209,000 in March. "This weakness is not carrying through the second quarter," said Gus Faucher, senior economist at PNC Financial Services in Pittsburgh. Economists estimate severe weather could have chopped off as much as 1.4 percentage points from GDP growth. The government, however, gave no details on the impact of the weather. Inventory Growth Decelerates Businesses restocked inventories to the tune of $111.7 bln in the final three months of last year, but added only $87.4 billion more to stocks in the first quarter, the smallest amount since the second quarter of 2013. The slowdown in restocking subtracted 0.57 percentage point from GDP growth in the first quarter. Trade also undercut growth, taking off 0.83 percentage point, partly because of the weather, which left goods piling up at ports. Exports fell at a 7.6 percent rate in the first quarter, the largest decline in five years, after growing at a 9.5 percent pace in the final three months of 2013. Together, inventories and trade sliced off 1.4 percentage points from GDP growth. A measure of domestic demand that strips out exports and inventories expanded at a 1.5 percent rate. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 3 percent rate, reflecting a spurt in spending on services linked to demand for heating during the winter and the Affordable Healthcare Act, which expanded health care coverage to many Americans. Spending on services grew at its quickest pace since the second quarter of 2000. Spending on goods, however, slowed sharply, indicating that the frigid temperatures had reduced foot traffic to shopping malls. Consumer spending had increased at a brisk 3.3 percent pace in the fourth-quarter. Harsh weather also undercut business spending on equipment. While investment in nonresidential structures, such as gas drilling, rebounded, the increase was minor. Business spending on equipment fell at its fastest pace in nearly five years. Investment in home building contracted for a second straight quarter, in part because of the weather. But a rise in mortgage rates over the past year has also hurt. A second quarter of contraction in spending on home building suggests a housing recession, which could raise some eyebrows at the U.S. central bank. A bounce back is, however, expected in the April-June period.

Jana's Barry Rosenstein Discusses the Current State of Activist Investing

Activist investing doesn't have to be contentious.

Jana's Barry Rosenstein thinks that companies are now often responding to activists who approach them with sensible ideas.

In many cases everyone can win (shareholders, activists, management).

About the author:Canadian Valuehttp://valueinvestorcanada.blogspot.com/

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Chuck Royce - Small-Cap Opportunities in a Bull Market

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5 Stocks Gearing Up for a Big Earnings Squeeze

DELAFIELD, Wis. (Stockpickr) -- Short-sellers hate being caught short a stock that reports a blowout quarter. When this happens, we often see a tradable short squeeze develop as the bears rush to cover their positions to avoid big losses. Even the best short-sellers know that it's never a great idea to stay short once a bullish earnings report sparks a big short-covering rally.

>>5 Rocket Stocks to Buy in March

This is why I scan the market for heavily shorted stocks that are about to report earnings. You only need to find a few of these stocks in a year to help enhance your portfolio returns -- the gains become so outsized in such a short time frame that your profits add up quickly.

That said, let's not forget that stocks are heavily shorted for a reason, so you have to use trading discipline and sound money management when playing earnings short-squeeze candidates. It's important that you don't go betting the farm on these plays and that you manage your risk accordingly. Sometimes the best play is to wait for the stock to break out following the report before you jump in to profit off a short squeeze. This way, you're letting the trend emerge after the market has digested all of the news.

Of course, sometimes the stock is going to be in such high demand that you risk missing a lot of the move by waiting. That's why it can be worth betting prior to the report -- but only if the stock is acting technically very bullish and you have a very strong conviction that it is going to rip higher. Just remember that even when you have that conviction and have done your due diligence, the stock can still get hammered if The Street doesn't like the numbers or guidance.

>>5 Bargain Bin Stocks to Buy in March

If you do decide to bet ahead of a quarter, then you might want to use options to limit your capital exposure. Heavily shorted stocks are usually the names that make the biggest post-earnings moves and have the most volatility. I personally prefer to wait until all the earnings-related news is out for a heavily shorted stock and then jump in and trade the prevailing trend.

With that in mind, here's a look at several stocks that could experience big short squeezes when they report earnings this week.

RadioShack

My first earnings short-squeeze play is electronics retailer RadioShack (RSH), which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect RadioShack to report revenue of $1.12 billion on a loss of 15 cents per share.

>>5 Stocks Ready to Break Out

The current short interest as a percentage of the float for RadioShack is extremely high at 42.2%. That means that out of the 89.69 million shares in the tradable float, 40.61 million shares are sold short by the bears. This is a monster short interest on a stock with reasonably low float. Any bullish earnings news could easily spark a large short-covering rally for shares of RSH post-earnings.

From a technical perspective, RSH is currently trending above both its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock has been uptrending over the last two months, with shares moving higher from its low of $2.02 to its intraday high of $2.79 a share. During that move, shares of RSH have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of RSH within range of triggering a major breakout trade post-earnings.

If you're bullish on RSH, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 200-day moving average of $3.01 a share to some more near-term resistance at $3.09 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 2.53 million shares. If that breakout materializes after earnings, then RSH will set up to re-test or possibly take out its next major overhead resistance levels at $3.50 to $3.88 a share, or even $4.36 a share.

I would simply avoid RSH or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day moving average of $2.47 a share to more near-term support at $2.36 a share with high volume. If we get that move, the RSH will set up to re-test or possibly take out its next major support levels at $2.18 to its 52-week low of $2.02 a share. Any high-volume move below $2.02 a share will then push shares of RSH into new 52-week-low territory, which is bearish technical price action.

Molycorp

Another potential earnings short-squeeze trade idea is rare earth minerals player Molycorp (MCP), which is set to release its numbers on Monday after the market close. Wall Street analysts, on average, expect Molycorp to report revenue $148.22 million on a loss of 29 cents per share.

>>5 Stocks to Sell Before It's Too Late

The current short interest as a percentage of the float for Molycorp is extremely high at 35.6%. That means that out of the 186.01 million shares in the tradable float, 66.40 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then shares of MCP could easily soar sharply higher post-earnings as the bears rush to cover some of the bets.

From a technical perspective, MCP is currently trending above its 50-day moving average and below is 200-day moving average, which is neutral trendwise. This stock has been uptrending a bit over the last month, with shares moving higher from its low of $4.55 to its recent high of $5.62 a share. During that move, shares of MCP have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of MCP back above its 50-day moving average and it's quickly pushing the stock within range of triggering a big breakout trade post-earnings.

If you're in the bull camp on MCP, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $5.62 to $5.80 a share and then once it clears its 200-day moving average of $5.87 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 6.71 million shares. If that breakout takes hold, then MCP will set up to re-test or possibly take out its next major overhead resistance level at $6.45 a share. Any high-volume move above $6.45 will then give MCP a chance to re-fill some of its previous gap-down-day zone from last October that started at $7.25 a share.

I would simply avoid MCP or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support levels at its 50-day moving average of $5.23 a share to more near-term support at $5.09 a share with high volume. If we get that move, then MCP will set up to re-test or possibly take out its next major support level at its 52-week low of $4.51 a share.

Veeva Systems

Another potential earnings short-squeeze candidate is cloud-based software solutions provider for the life sciences industry Veeva Systems (VEEV), which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Veeva Systems to report revenue of $58 million on earnings of 6 cents per share.

>>3 Stocks Spiking on Big Volume

The current short interest as a percentage of the float for Veeva Systems is extremely high at 44.4%. That means that out of the 15 million shares in the tradable float, 6.67 million shares are sold short by the bears. This is a huge short interest on a stock with a very low tradable float. Any bullish earnings news could easily spark a monster short-covering rally for shares of VEEV post-earnings.

From a technical perspective, VEEV is currently trending above its 50-day moving average, which is bullish. This stock has been uptrending pretty strong for the last month, with shares moving higher from its low of $28.81 to its recent high of $38.08 a share. During that uptrend, shares of VEEV have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of VEEV are now trending right around some key overhead resistance levels that if taken out post-earnings could trigger a big breakout trade.

If you're bullish on VEEV, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some key near-term overhead resistance levels at $38.08 to $40 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 862,605 shares. If that breakout hits, then VEEV will set up to re-test or possibly take out its next major overhead resistance levels at $45 to its all-time high at $49 a share. Any high-volume move above $49 post-earnings will then give VEEV a chance to trend north of $50 a share.

I would avoid VEEV or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support levels at $33.68 a share to its 50-day moving average of $32.81 a share with high volume. If we get that move, then VEEV will set up to re-test or possibly take out its next major support levels at $30 to $28.71 a share. Any high-volume move below $28.71 a share would then push shares of VEEV into new all-time-low territory, which is bearish technical price action.

YY

Another earnings short-squeeze prospect is Chinese online social media platform operator YY (YY), which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect YY Inc to report revenue of $84.48 million on earnings of 46 cents per share.

>>5 Big Charts to Trade for Gains

The current short interest as a percentage of the float for YY is very high at 15.3%. That means that out of the 15.90 million shares in the tradable float, 2.44 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 16.2%, or by about 339,000 shares. If the bears get caught pressing their bets into a bullish quarter, then shares of YY could easily rip sharply higher post-earnings as the shorts rush to cover some of their trades.

From a technical perspective, YY is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong over the last three months, with shares soaring higher from its low of $46.64 to its recent high of $77.90 a share. During that uptrend, shares of YY have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of YY within range of triggering a major breakout trade post-earnings.

If you're bullish on YY, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its all-time high of $77.90 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1.63 million shares. If that breakout hits, then YY will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $95 to $100 a share.

I would simply avoid YY or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support levels at $67.50 to $66.50 a share with high volume. If we get that move, then YY will set up to re-test or possibly take out its next major support levels at its 50-day moving average of $62.65 a share to $56 a share.

PetSmart

My final earnings short-squeeze play is specialty retailer of pet products, services, and solutions PetSmart (PETM), which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect PetSmart to report revenue of $1.83 billion on earnings of $1.21 per share.

The current short interest as a percentage of the float for PetSmart is pretty high at 9.9%. That means that out of the 102.89 million shares in the tradable float, 10.24 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 10.4%, or by about 965,000 shares. If the bears get caught pressing their bets into a strong quarter, then shares of PETM could easily surge sharply higher post-earnings as the bears rush to cover some of their positions.

From a technical perspective, PETM is currently trending above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock recently formed a double bottom chart pattern at $61.99 to $62.12 a share. Following that bottom, shares of PETM have started to spike higher and move back above its 50-day moving average. That move is now pushing shares of PETM within range of triggering a near-term breakout trade.

If you're in the bull camp on PETM, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 200-day moving average of $70.20 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 1.56 million shares. If we get that move soon, then PETM will set up to re-test or possibly take out its next major overhead resistance levels at $74 to $75 a share, or even its 52-week high at $77.32 a share.

I would avoid PETM or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below both it 50-day moving average of $66.68 a share to more near-term support at $63.61 a share with high volume. If we get that move, then PETM will set up to re-test or possibly take out its next major support levels $62.12 to $61.99 a share. Any high-volume move below those levels will then give PETM a chance to tag its next major support levels at $60 to $58 a share.

To see more potential earnings short squeeze plays, check out the Earnings Short-Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com.

You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.