Did I go too far last week?
Countering the market's bubbly enthusiasm on Friday, I singled out seven bellwethers that analysts see posting lower quarterly profits this week. Things may be bad, but they're not that bad. In fact, there are several companies that are actually growing in this recessionary climate.
Since I was a downer over the weekend, let me be the one to pick you up today. Here are seven companies that analysts see posting healthier bottom lines this week.
|
Company
|
Latest Quarter EPS
(Estimated)
|
Year-Ago Quarter EPS
|
|
CarMax (NYSE: KMX)
|
$0.17
|
$0.06
|
|
FactSet Research (NYSE: FDS)
|
$0.74
|
$0.67
|
|
AutoZone (NYSE: AZO)
|
$4.45
|
$3.88
|
|
Bed Bath & Beyond (Nasdaq: BBBY)
|
$0.47
|
$0.46
|
|
American Greetings (NYSE: AM)
|
$0.06
|
$0.05
|
|
McCormick (NYSE: MKC)
|
$0.54
|
$0.50
|
|
Research In Motion (Nasdaq: RIMM)
|
$1.00
|
$0.86
|
Source: Yahoo! Finance.
Clearing the table
Let's start at the top. CarMax sells used cars, but it aims to create a customer-friendly environment, banishing any stereotypes of sleazy hucksters peddling lemons via late-night infomercials. Consumers may be weary of big-ticket purchases, but used car lots do offer serious markdowns over the new-car showrooms. Its up-front strategy is apparently paying off for CarMax, since analysts expect profits to triple in its latest quarter.
FactSet Research is a popular provider of data to the investing community. Higher earnings and higher dividends are a great way to turn a stock research enabler into a good investment of its own.
AutoZone is the auto-parts retailing giant. This has been a great niche lately. If folks aren't buying new cars -- Cash for Clunkers notwithstanding -- they're going to find themselves at the local auto parts store to maintain their older vehicles. In short, selling spare car parts has become the ultimate all-weather industry.
Bed Bath & Beyond is a surprising name to find here. If folks aren't moving, or tapping credit lines to remodel their homes, is there really a market for less costly makeovers, such as replacing the shower curtain or springing for a new bedding set? Wall Street apparently thinks so, and the pros may be onto something. They figured that quarterly earnings would take an understandable dip three months ago; instead, Bed Bath & Beyond delivered its first year-over-year gain in a year and a half.
Next, we have American Greetings. Wait -- if everyone is more than happy sending Facebook birthday requests or JibJab animated greetings, how can this company grow? Well, analysts think that American Greetings won't need a "Get Well Soon" card after Thursday's report, even if this is the seasonally sleepy time for the industry.
McCormick is a spice-rack regular. Food companies are typically defensive, but this economy got so bad that folks were bypassing the big food brands to snap up cheaper store brands. McCormick appears to be bucking that trend.
Finally, we have Research In Motion. There are a whole lot of new smartphones on the market, but Research In Motion's BlackBerry is still the top dog that everybody is chasing.
Cross those fingers, but know the fundamentals
There aren't too many companies reporting this week, so it's encouraging to see so many companies that are growing their bottom lines in this iffy environment.
This doesn't mean that investors can rest easy. The bad news is that these companies are expected to post improving results. The optimism is already baked into their share prices. It makes it easier for them to slip, but why begin worrying about the companies that we aren't supposed to be worrying about?
If analysts are doing a good job modeling their profit targets, we'll be just fine.
Some other reads to get you through the week:
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