Could These Top Stocks Trade Up Big Again After Reporting Earnings?

A new research note from the analysts at Cowen highlights some top stocks that have not yet reported second-quarter earnings, but all of which traded higher after they reported their first-quarter numbers this year. With first quarter often being the slowest for Wall Street stocks, it makes sense that some of these companies could follow through with good second-quarter releases and trade higher again.

We picked the five stocks in the Cowen report that traded the highest after reporting first-quarter earnings.

Level 3 Communications Inc. (NYSE: LVLT) traded up a whopping 16% after it reported first-quarter earnings, and the company is set to report on July 29. It provides core network services, including transport services comprising wavelengths, private lines, transoceanic services and dark fiber, as well as related professional services; and colocation and data center services, such as cloud, hosting and application management solutions.

The company is almost always rumored as a takeover candidate as it provides all the solutions a huge communications provider may want to have and own. The Thomson/First Call consensus price target for the stock is $45.22. Level 3 Communications closed Monday at $45.44 a share.

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Sprint Corp. (NYSE: S) was up a very strong 11.3% after it reported first-quarter earnings. Almost every time the talk turns to Sprint, it turns to the potential purchase or merger with T-Mobile. Many on Wall Street plain and simple do not think the deal would ever be approved by regulators. Others feel there is a chance, as a third dominant player could potentially help drive prices down for consumers.

For now, the deal is still on hold awaiting further announcements. The consensus price target for the stock is $7.28. Shares closed trading Monday at $7.67. Sprint announces second-quarter earnings on July 30.

Rackspace Hosting Inc. (NYSE: RAX) was up a solid 8.5% after reporting earnings. It will report its second-quarter numbers on August 11. The company caught Wall Street’s attention back in the spring when it said it was looking at strategic alternatives, which could mean a buyout or merger. Cowen feels that the earnings report will be solid, but nobody will really care as Wall Street and investors continue to focus on the strategic alternative news. Rackspace bills itself as the global leader in hybrid cloud and founder of OpenStack, the open-source operating system for the cloud.

The Cowen price target is posted at a whopping $57, so clearly the analysts are thinking a deal gets done. The consensus target is at $41.32. Rackspace closed Monday at $31.22 a share.

T-Mobile US Inc. (NYSE: TMUS) was up 8.4% after first-quarter earnings and, as we mentioned, continues to be surrounded by the rumors, chatter and outright clamor over it potential buyout or merger with Sprint. Many top analysts on Wall Street think that the company could emerge as the fastest growing wireless company in the United States, with 7.0% service revenue growth as subscriber additions are slow but remain solid.

T-Mobile will report its second-quarter numbers on July 31. The consensus price target is at $35.21. Shares closed Monday at $31.79.

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Lumos Networks Corp. (NASDAQ: LMOS) did well after reporting first-quarter results and was up 5.4%. The company is a fiber-based service provider in the Mid-Atlantic region serving carrier, business and residential customers over a dense fiber network offering data, voice and IP services. With a fiber network of 7,467 fiber route miles, Lumos Networks connects 633 fiber to the cell sites, 13 data centers and approximately 1,400 on-net buildings.

The company will report earnings on July 28. Investors are paid a very solid 3.8% dividend. The consensus price target for the stock is $18.30, and Lumos closed trading on Monday at $15.07.

There is absolutely no guarantee that any of these stocks will trade higher after they report second-quarter numbers. However if any of them do put together solid back-to-back quarters, investors that own the stocks could see a very nice pop.