Editor's note: The original version of this article contained inaccurate information about Pacific Sunwear's recent guidance. The Fool regrets the error.
No one knows a company better than those who run it. Though they're not always right, the people in charge generally have more insight into how their companies will behave in the future.
Sometimes, we look to see whether insiders are buying stocks. Other times, we check to see whether the companies are buying back their own shares. Both of these can be bullish signs for a company.
Right now, we want to tap into management's knowledge by looking at companies that raise their earnings guidance for the coming quarter or year. Over time, earnings growth follows sales growth, and when a company says it will have more profits, we expect the stock price to soon follow.
Tap into CAPS
We'll enlist the Motley Fool CAPS community-intelligence database to pinpoint promising stocks. The system asks professional and novice investors alike to rank the thousands of stocks in our CAPS universe, overweighting the opinions of the most successful and accurate among them. From that data, CAPS rates each company from one to five stars, with five stars being the best.
At present, we're harnessing the knowledge of more than 24,000 analysts to get the inside scoop on whether these companies are a flash in the pan, or potentials with true staying power. Here are the latest companies to raise their earnings guidance, including the CAPS community's opinion on each:
|
Company |
Forecast Period |
New Guidance |
Analyst Forecast |
Year-Ago Actual Earnings |
CAPS Rating |
|---|---|---|---|---|---|
|
Boston Beer |
FY 2007 |
$1.42-$1.55 |
$1.40 |
$1.07 |
*** |
|
Kroger |
FY 2007 |
$1.60-$1.65 |
$1.58 |
$1.54 |
**** |
|
Coventry Health Care |
FY 2007 |
$3.92-$3.98 |
$3.93 |
$3.47 |
***** |
|
Ann Taylor |
FY 2007 |
$2.15-$2.25 |
$1.96 |
$1.98 |
*** |
As always, this is not a list of recommendations to buy, but rather a starting point for further research.
Raising their voices
Here's what some CAPS players are saying about these stocks:
-
gcbrewer says of Boston Beer, "Craft beer continues its march in yearly volume growth, and the Samuel Adams brands are helping drive this growth."
- Last August, top-rated CAPS player jmacn22 presciently noted: "Ann Taylor began its turnaround plans about a year ago, and results so far have been impressive. Inventory is tighter and the merchandise is more fresh. Double-digit comps in the most quarter suggest that things are working just nicely, thank you very much."
That's what some of the CAPS players are thinking about these companies. Do you agree? If you'd like to learn more about these stocks, or offer your own insights on them or any other stock, CAPS is a great place to start. Just click here to join the newest venture into collective investor intelligence.
Coventry Health raised guidance and is a recommendation of Motley Fool Stock Advisor. A trial subscription to the leading stock selection service lets you see whether there's more to it than that. There's a no-risk 30-day guest pass waiting for you here.
Fool contributor Rich Duprey does not own any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.
