For some investors, the reporting season in August feels like a blur. Dozens of ASX-listed companies can report their earnings in a day, providing a sea of information.
Newspapers, investment newsletters, stockbroking firms and “finfluencers” (online financial influencers) might report on the main results.
A fund manager could compare a company’s full-year profit or loss to the consensus estimate (the average of forecasts from stockbroking analysts who cover that stock). Was the earnings result better or worse than the market expected?
The market, of course, gives an instant verdict on the result, driving a company’s share price higher or lower - sometimes by a lot.
In FY21, a record 147,077 market announcements were published on ASX, up 7% on a year earlier and part of a rising trend of more announcements being released each year. Announcements range from information about listed entities and their securities to corporate actions and regulatory filings.
It’s no surprise, then, that some investors feel overwhelmed by the sheer volume and speed of market announcements, particularly in August.
How do you make sense of an earnings announcement that might be 50 pages or more? How do you keep up with so many announcements over a few weeks? Should you even try?
And what of the flurry of market opinions that follow the main results? In a newspaper story, one stockbroking analyst likes the company’s result. Another says the result disappointed. Someone on social media argues the stock is a “screaming buy”.
Don’t despair if reporting season feels like it is hard to follow. Even professional investors sometimes struggle to keep up with earnings results during reporting season. Reporting season in August is their busiest time.
Some simple tips and “hacks” can help you navigate reporting season and market announcements throughout the year. Here are seven to consider:
Reporting season means different things to different investors. Market announcements might have less urgency for a long-term investor who buys and sells infrequently.
In contrast, a day-trader or active investor might sweat on an earnings result, buying or selling shares soon after the announcement.
Understanding your investment goals, needs and timeframe is an important first step in how you follow company announcements during earnings season.
ASX-listed companies must report their earnings at least twice a year, within two months of their balance-sheet date. For companies with a 30 June year-end, the reporting season for their full-year earnings result is in August. Half-year results are usually released in February.
Not every ASX-listed company follows this timetable (as balance-sheet dates can vary). But a rule of thumb is to expect the main earnings announcements in February and August. August to October is another important information period because many companies release their annual report then and issue a trading update.
Some news publications and broking firms publish calendars of upcoming company reports during earning seasons. Alternatively, you can usually get the date of a company’s upcoming earnings result through a notification in its market announcements.
ASX-listed entities and issuers of ASX-quoted products release announcements to the market through the ASX Market Announcements Platform. Market announcements are then made available on the ASX website and through data providers, such as IRESS, Thomson Reuters, Bloomberg or Morningstar.
ASX publishes latest and past ASX market announcements on its website. Today’s Announcements show all the announcements for that day. Alternatively, you can search for past market announcements by entering an ASX-listed entity’s ASX Code.
When seeking a market announcement, always go to the source: the ASX website or through data providers that publish ASX market announcements.
Relying only on third-party information for the content of a market announcement – such as a report on social media – could expose you to incorrect or misleading information about an ASX-listed entity.
Consider an investor who owns 10 shares and wants to buy a few more. Even tracking 10 full-year earnings results in August can be challenging if you don’t have a process, let alone following announcements from companies you are considering buying.
Portfolio watchlists are a great help. They help you monitor the profit or loss of shares, options, warrants, exchange traded funds (ETFs) or other securities you own – or are thinking about buying. You can set up to 10 free portfolio watchlists on ASX by registering with ASX Personal Investor.
In this example, the investor sets up a watchlist for her 10 shares. She starts another watchlist for shares she is thinking of buying. Through the watchlists, the investor can easily tell when the company she follows releases a market announcement. This is a big help during earnings season.
Market announcements are released in PDF form. Make sure you have Adobe Acrobat Reader installed on your device, to view PDFs. This can be downloaded for free at the Adobe website. Before downloading large PDFs (such as a long announcement or annual report) consider the file size and how this might affect your data plan.
When searching market announcements, the first thing you’ll notice is the volume of announcements, particularly for large ASX-listed companies. This can include announcements about a change in a substantial shareholding, a share buyback notice, or other information that may be less relevant to you.
One way of sifting through these announcements is to focus on “price-sensitive announcements”. A price-sensitive announcement relates to information that is expected to have a material effect on the price or value of an entity’s securities. A company’s full-year earnings result is a price-sensitive announcement.
The ASX homepage publishes the latest price-sensitive announcements. Alternatively, scroll through Today’s Announcements to see which ones are price sensitive.
ASX portfolio watchlists can alert you to price-sensitive announcements from companies you follow. The investor who has a watchlist of 10 shares receives a notification via the “bell counter” at the top right-hand corner of the (portfolio) page whenever there is a price-sensitive announcement for any codes in their watchlist.
When ASX-listed entities release their results, there can be several announcements at once. The main document is the statutory report, which is often called the “preliminary final report”. There could be an accompanying notification on the company’s dividend/distribution, a media release, and/or results presentation. Some companies release their annual report at the same time as their earning results.
Investors use this information differently. A professional investor might pore through all the announcements, reading them in detail and assessing the financial results in the statutory report, line by line. A small investor might be more interested in the company’s results presentation and what management says about the outlook.
Many ASX-listed companies now release detailed presentations with their earnings results (often in PowerPoint form).
If you’ve set up a portfolio watchlist via ASX, you’ve taken an important step to following company announcements during reporting season.
The next step is routine. Will you read earnings result from companies you own? How much time will you allocate? When will you read the announcement? Will you rely on your financial adviser or stockbroker to interpret the results for you?
Whichever path you take, it’s a good idea to track reporting season, even if that just means following the main business news reports in a reputable publication.
Learning how to read a market announcement – and knowing what to look for – is a key investment skill. For some, these announcements might seem daunting at first. But if you persevere, you’ll learn about the company, and often its industry, consumer trends, and the economy. Market announcements provide valuable insights.
So, this August, keep an eye on market announcements from ASX-listed entities. And, if you haven’t already, consider setting up a portfolio watchlist.