Though its wild trading swings last month may have tested your mettle, the stock market isn't broken. Sure, I recently singled out seven stocks projected to post lower year-over-year earnings this week -- but that's just one side of the story.
Thankfully, there's more good news than bad news on the earnings front. Between recessionary cost-cutting and general improvement from last year's depressed levels, several companies are in better shape now than they were a year ago. Let's go over seven companies that analysts see posting healthier bottom lines this week:
|
Company |
Latest Quarter EPS (Estimated) |
Year-Ago Quarter EPS |
|---|---|---|
|
United Natural Foods |
$0.42 |
$0.39 |
|
Canadian Solar |
$0.11 |
($0.13) |
|
Suntech Power |
$0.14 |
$0.01 |
|
Coldwater Creek |
($0.04) |
($0.08) |
|
Hovnanian |
($0.64) |
($1.50) |
|
Collective Brands |
$0.75 |
$0.59 |
|
SAIC |
$0.31 |
$0.29 |
Source: Yahoo! Finance.
Clearing the table
United Natural Foods puts out more than 60,000 natural, organic, and specialty products. That's a good market to serve these days. Whole Foods has posted back-to-back quarters of positive comps, and mainstream grocers continue to widen their selection of organic edibles.
Canadian Solar and Suntech are leaders in the nascent solar energy market. We can cheat here, since most of their rivals have already posted healthy year-over-year improvements on the bottom line for their latest quarters. This has been a volatile industry over the past few years, but at the moment, momentum is clearly on the sector's side.
Coldwater Creek is a mail-order apparel retailer also found in many suburban shopping malls. Coldwater decided to cash in on its mail-based and e-commerce success by rolling out physical storefronts six years ago. True, analysts see the retailer posting a deficit tomorrow afternoon, but this is seasonally expected. More importantly, that shortfall should only be half as large as it was a year ago.
Hovnanian Enterprises is a real estate developer. With the industry flashing comeback signs, the word homebuilder no longer carries the negative stigma it did during the darkest recessionary stretches. We can cheat here, too, since the many residential developers that have reported in recent weeks have delivered narrower losses than they did a year ago. We should hold our applause until these companies are actually profitable, but at least Hovnanian appears to be the next company to post improving financials.
Collective Brands isn't a household name, but its flagship concept -- Payless ShoeSource -- should ring a bell with thrifty footwear shoppers. Payless is a popular chain of low-end footwear, and in good times or bad, soles wear thin and shoes fall apart.
Finally, we have SAIC. The military contractor may be at the mercy of fluctuating defense budgets, but it's holding up just fine. It had a backlog of $15.6 billion in signed business orders at the end of its previous quarter, with a third of that already funded.
Cross those fingers, but know the fundamentals
These aren't the only companies expected to post year-over-year gains this week. Several companies have either found ways to grow during the recession, or have simply cut enough corners to show improvement on the bottom line.
This doesn't mean that investors can rest easy. The bad news here 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.
Which of the many earnings report due out this week are you looking forward to? Share your enthusiasm in the comment box below.
