Trading Earnings: Sticking it to the Bottom Line

Nordson Corporation (NDSN) is set to discuss earnings before the market opens Thursday, December 18. With direct operations in 30 countries worldwide, Westlake, Ohio-based Nordson Corporation is the world’s leading manufacturer of systemsthat apply adhesives, sealants and coatings during manufacturing operations.

NDSN is expected to earn a profit of 84 cents for its 4th quarter. We expect the adhesive company to announce earnings that will miss investors’ and analysts’ expectations.img 8

KeyBanc Capital Markets analyst Matt Summerville recently lowered estimates of Nordson’s earnings per share to 82 cents from 87 cents for the fiscal fourth quarter and to $3.35 from $3.41 for 2008. For 2009, he now expects earnings per share of $2.70, down from $3.85.
According to our technical analysis, this stock is poised to move following earnings and it has a history of jumping wildly following its earnings report. Last time out the stock dropped more than 25% following its quarterly check up. NDSN shares have also soared 10-15% following the call. We see it as an ideal candidate for an options straddle.

Suggested Stop Long: $25.31

Suggested Stop Short: $31.17

Filed Under: Day Trades

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