Quick Win by the Algorithm: Better Than Expected Quarter Earnings

Quick Win By The Algorithm

On April 21, 2017, the I Know First algorithm issued a bullish forecast for Systemax Inc. (NYSE: SYX). SYX had a signal of 37.38 and a predictability of 0.21. As a result, in accordance with the forecast, the company’s stock increased by 31.62% within 14 days, showing a quick win by the algorithm.

Quick Win

Systemax Inc. (SYX) is a retailer selling brand names and private labels. The company is composed of two segments. The Industrial Product Group focuses on hardware, janitorial supplies, material and handling, furniture and office products, and more. The EMEA Technology Product Group sells information and communication products, computer parts, software, electronics, servers, security equipment, and other electronic accessories. The company was founded in 1949 and headquartered in Port Washington, New York.

On May 4, 2017, the company announced its 1st quarter earnings of 2017. After missing earnings estimate for the 4th quarter of 2016, the company looked for improvement.  Systemax followed a new strategy to streamline the company and exit under performing businesses.  As a result, the company announced results surpassing estimates. Thus, changing investors perception of the company to become bullish.  The better than expected earnings caused the stock to increase over 28% the next trading day.

If we were to compare Systemax’s earnings this quarter compared to last year, the company increased net sales from $286.8 million to $302.5 million. Net sales increased due to an 11.5% increase in sales from Industrial Product Group.  One of the biggest improvements came from the company’s operating income.  Operating income increased from $3.1 million to $12.4 million.  That is roughly a 400% increase.

This bullish forecast on SYX was sent to the current I Know First subscribers on April 21, 2017.

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Before making any trading decisions, consult the latest forecast as the algorithm updates predictions daily. Although the algorithm can be used for intra-day trading, the predictability tends to become stronger for forecasts over longer time-horizons.