3 Stocks that Will Move the S&P 500 This Week

In truth, every member of the S&P 500 moves the index on a daily basis. But the three stocks below are likely to make outsized moves this week: Not only are lots of investors are shorting them -- i.e., betting against them -- but each company will be reporting earnings.

Picking out such stocks before they make major moves is actually easier than you might think. The three stocks I singled out last week moved an average 11% after reporting earnings. Here are the three companies to keep an eye on this week, what analysts are expecting, and why they're so heavily shorted.

 

% of Shares Short

When to Watch

Expected Revenue (millions)

Expected EPS

Frontier Communications

21%

Wednesday

$1,200

$0.06

Windstream

14%

Thursday

$1,500

$0.09

Chesapeake Energy

10%

Wednesday

$3,500

$0.43

Sources: Company websites; E*Trade; finviz.com.


It should be noted that Frontier actually reports earnings on Tuesday, but not until the market closes. As such, any major moves in its stock will take place during Wednesday's trading session.

Frontier Communications
Frontier is in the unenviable position of having a customer base consisting of rural, residential landlines. It's easy to see how such a business has no future. That helps explain why investors require such a hefty dividend -- currently yielding 9% -- to own a piece of the company. But even the dividend itself has a history of being cut.

Frontier executives are aiming to transition the company to one with a much larger base of business clients. While the company has been making headway here, the fact that it is still making large interest payments on long-term debt hasn't helped one bit. If there's any slowdown in gaining new business clients, investors should be prepared for bad news when the market opens Wednesday.

Windstream
Like Frontier, Windstream is also caters to rural customers. Windstream also has an outsized dividend yield, currently hovering around 11.7%.

Unlike Frontier, however, Windstream has been able to grow its operating cash flow from $1.1 billion in 2011 to $1.65 billion over the past 12 months. This has provided investors with a nice stream of income for years.

That being said, Windstream has debt problems of its own. And unless it is able to convince rural customers to sign up for high-speed Internet and video services, investors could have a rough ride ahead this week.

Chesapeake Energy
Finally, we have the nation's second-largest producer of natural gas. It's been an eventful two years for investors in the company, as they've had to endure the shenanigans of former CEO and founder Aubrey McClendon. Now that he's gone, many investors are breathing a sigh of relief, and shares are up almost 70% on the year.

But a run like that has short-sellers wondering if the stock has gotten ahead of itself. Chesapeake has been selling off a ton of noncore assets and laying off hundreds of employees to help raise funds over the past year.

While those are relatively easy moves to make, for the company's stock to prove the shorts wrong, it needs to have success in producing natural-gas liquids and oil instead of traditional dry gas.

Interested in Dividends? Look Here Instead.
Not all dividend stocks are created equal. Though Windstream and Frontier both offer outsized payouts, they aren't the type of healthy dividends that build wealth and help you rest easy at night.  

With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

The article 3 Stocks that Will Move the S&P 500 This Week originally appeared on Fool.com.

Fool contributor Brian Stoffel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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