3 Stocks Investors Don't Want to Miss Ahead of Earnings

Most investors inconsistently view quarterly earnings as a catalyst for stock prices upon the news release. They often find themselves trapped in the volatility of sudden moves and face the risk of large—or total, in the case of options—losses if the direction of the stock after the announcement goes the wrong way.

There is a way to somewhat accurately predict where a stock could go after earnings announcements or to see where broader markets are betting these stocks could go on the event. Keeping the saying "it must be expensive for a reason" in mind can be useful for investors in these scenarios, likewise for cheapness. Here are three stocks becoming ‘expensive' before they report earnings this month and why markets are willing to pay.

Aerospace and defense stock Lockheed Martin Co. (NYSE: LMT), wireless and communications provider T-Mobile US Inc. (NASDAQ: TMUS), and even technology stock CoStar Group Inc. (NASDAQ: CSGP) are some of the stocks reporting their subsequent quarrel earnings this month, and they all share the common factor of commanding valuation premiums compared to their peers. This is why markets might be willing to overpay for these stocks ahead of their announcements.

Lockheed Martin Positioned for Strong Quarter as Middle East Conflicts Drive Rising Arms Demand

As conflicts in the Middle East arise and escalate, the United States and its military allies will have to call upon domestic arms manufacturers like Lockheed Martin to help control and handle these situations accordingly, creating new demand for contracts in the company.

Investors can see this trend taking on momentum through a government contract ...

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