Thursday’s Post-Earnings Movers: Is it Time to Buy? – Safeway Inc. (SWY), Responsys Inc (MKTG)

Jack in the Box has reported revenue of $1.5 billion over the last 12 months, which is a $1 billion loss over the last five years. The company’s Qdoba chain has fared nicely compared to competitors Taco Bell and Chipotle Mexican Grill, Inc. (NYSE:CMG). However, its business plan of closing stores and cutting costs to beat bottom line expectations does not appear to be a long-term plan for success. In my opinion, this is not a stock I’d like to own, and believe that Thursday’s gains should be used as an opportunity to sell.

Conclusion

In my book, Taking Charge With Value Investing (McGraw-Hill), I examine human behavior and the psychological effects that take place in the minds of investors when a stock shoots higher or falls drastically lower (think roulette at a casino). For many investors, chasing these trends is common, even addicting, and very few are capable of realizing their losses because of their occasional gain. Investors need to avoid this behavior, and not look at the performance and then the news, but rather read the earnings report first and then make a decision based on the information within. By doing so, you will be able to find the inconsistencies and a distinction between performance and fundamentals, which creates value and allows for large returns.

The article Thursday’s Post-Earnings Movers: Is it Time to Buy? originally appeared on Fool.com and is written by Brian Nichols.

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