Hump-Day Humor: 4 Fun Facts On 2012/2013 Earnings

Tyler Durden's picture

It's that time of year when 2013 outlooks and strategy pieces bog down an otherwise already overloaded inbox. Some are wise; some not so much. We thought the following four wise fun facts noted from Morgan Stanley's Adam Parker would brighten-up an otherwise dull Wednesday evening. Full details below but: just 10 S&P 500 stocks accounted for 88% of 2012 EPS growth; those same 10 will account for only 34% of the growth next year; 5 stocks are projected to account for one-quarter of the entire S&P 500's EPS growth in 2013; and of the 20 firms expected to grow earnings faster in 2013 than in 2012, 8 of them will be swinging from major slumps to miraculous gains. It seems that once the fiscal cliff is behind us then the whole world is fixed, equities can initiate ramp-mode, and analysts' expectations have a chance of coming true. Parker, however, like us remains more stoic of reality with his 1434 end-2013 S&P 500 target (with downside 1135 possible).

Fun Fact 1: These 10 stocks accounted for 88% of the Earnings growth of the S&P 500 in 2012 - so much for diversification...


Fun Fact 2: those same 10 names will account for only 34% of EPS growth next year (still 2% of the names accounting for 34% of the growth is remarkable)


Fun Fact 3: These 5 firms are forecast to account for 25% of the S&P 500's EPS Growth in 2013!!


Fun Fact 4: And the following names will see 2013 earnings growth faster than 2012, some will be entirely miraculous in their resurgence...


So, all in all, the numbers remain highly concentrated, highly hopeful, and highly extrapolated...

as it appears 2013 expectations have a long way to fall back to reality (as many learned in 2012...)


Charts: Morgan Stanley

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fonzannoon's picture

so the earnings can continue to fall to zero while the index goes up each year....

Michaelwiseguy's picture

Hump-Day Fun; Please share this with all other blogs you visit, Thanks.

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Tsar Pointless's picture

Estimated S&P 500 earnings estimates for 2013.

The Average Amerikkkan's IQ.

Which has declined most?

Vote with your mind, not your ass.

SafelyGraze's picture

well well!

now that I'm dumping juniors and Dollar Geeral, I have a clearer idea of where to park my $150 of equity "throw-away" cash-on-the-sidelines.

thx for the actionable tips, tylerz!

NeedleDickTheBugFucker's picture

So all the value is in the S&P 10 index?

freedogger's picture

Not to worry, earnings will improve at these companies when layoffs are completed.

prains's picture

Do Olicorptocracy's earn?

Democratic koolaid's picture

The local computer superstore has just released the newest  apple model.. that will keep the economy happy for alittle!? 

chump666's picture

Obama's 2012 gift to BAC, nice, real nice.

I am really looking forward to 2013 when Nemesis arrives:

"Although a respected goddess, Nemesis had brought many sorrow to mortals, such as the story of Echo and Narcissus. She believed that no one should ever have too much good, and she had always cursed those who were blessed with countless gifts."

ebworthen's picture

Those earnings estimates look like a nice downhill run; good thing it's ski season, eh?

Yen Cross's picture

 I love where google and verizon climb that green cube!

Yen Cross's picture

 I bought some Micro Soft 2 weeks ago.  You guys can tease me all you want. I'm buying more on the dips.

freedogger's picture

I bet you didn't type that comment from Windows 8.

Yen Cross's picture

I'll bet you are 100% spot on...

dragoneyes74's picture

The big question for the next year or so is when will the final top in equities be before the big collapse comes?  I believe Bernanke has ONE more bullet before his actions are widely perceived as desperate, not working, and causing more harm than good (which, of course, they are, but they don't trade that way for now).  Meaning, he gets to double-down on asset purchases once more and the top from that rally will be the final top.  Whether he does it in December or not is anyone's guess, but he WILL at some point, and I don't think it will be anticipated in the same way that the recent one was, so it should have a few months or so in it, especially if it's seaonsally timed and we're not overbought.  I don't think it will boost phony profits as much as the previous QE's, but if it does, they will be capped by the inflation it causes.  And if the dollar gets down to its all-time lows, the Fed can only let it go so far before they are forced to give up and tighten.  Whether it takes Bernanke stepping down for this to happen, or him finally giving up on his ideas, they will have to telegraph the tightening ahead of time in attempt to control market's pricing in of it, which, of couse, won't work.  The top will happen either at the first whisper of slowing down asset purchases, or earlier from lackluster earning reports in the form of the market giving up hope on QE, but he has to fire that last bullet first.  I have little doubt that the fiscal cliff resolutions, whether in bites, or one big meal will push most, if not all, of the pain into the future.  And I think the pattern is set for how they will deal with the next month or so until a deal happens.  They've clearly learned what to say and what not to say publicly and when to do it.  Not that there won't be some serious selling at times, but I think it will be limited.  In my opinion, equities will grind upward to form a triple-all-time-high-top and that will be the top for the next decade.  Obviously, this is all speculation, and frankly I don't care since I have no exposure to equities and don't trade them because they are completely irrational.  Wake me up when it's Dow 6,000 and I'll be a buyer.  Actually, check that, if we do make a triple top, I'll be happy to scale into a short position and ride it down.  The more important question is what happens to the metals when this deflationary collapse occurs?  I think they get crushed with everything else, however, a collapse like this will result in a US default, which will cause an initial habitual flight to safety in bonds, but then a flight to safety away from bonds and the dollar to the metals when it's actually starts happening.  THAT is when the metal bugs' wet dreams come true.   

adr's picture

So only three companies that actually make stuff, or one really since IBM sold off thier hardware division to the Chinese, and Apple hasn't actually made anything in years. I actually don't know what IBM really does anymore?

So 90% of the 88% is pure paper pushing bankster bullshit. The 10% going to GE is questionable as well. In fact a lot of the rest was probably banks as well. How much of the total earnings can be attributed to actually producing goods of real value? 1% maybe less than that.

God if only we could have figured out bullshit was more profitable than production 100 years ago. Oh yeah, they did and created the Fed.

Acet's picture

I didn't saw the fun in those facts at all. Maybe a little humor (of the "everything is going to the shitter but at least the usual suspects will remain silly till the end" kind), but no fun.

Tum's picture

No worries. Bernanke can fix it. Ctrl+P heals all wounds.

orangegeek's picture

All seems about normal.  The spin continues to keep these markets up.  The objective is to suck in every last "long term" buyer before things tank.


Europe is up about 1% this morning on schnitzel und kartoffel.  Reading for trading today - wearing my best rubber nose and glasses.