7 Reasons Not to Worry This Week

Let's not let the "sell in May" purists get the last laugh. Sure, May was terrible, and June is off to a soft start. This doesn't mean that the rest of the next few months will play out that way.

I know I played the pessimist over the weekend, singling out seven stocks that are projected to posts lower quarterly profits this week than they did a year ago. Thankfully, there will be far more companies improving their bottom lines this week than those going the wrong way.

Let's go over seven publicly-traded companies that are expected to stand tall this week by posting year-over-year improvement on the bottom line.

Source: Yahoo! Finance.

Clearing the table
Let's start at the top with Dollar General. The deep-discount retailer timed its entry back into market perfectly. After a brief stint as a private company, Dollar General went public late last year, and it hasn't looked back since Thrifty shoppers love a good bargain, which Dollar General has provided for generations. The company delivered market-thumping results in its previous quarter, and expectations call for another period of healthy bottom-line growth. 

Mobile TeleSystems is a Moscow-based provider of wireless services. Beyond Russia, it's also a carrier in Ukraine, Uzbekistan, Turkmenistan, and Armenia. Analysts expect a healthy profit from Mobile TeleSystems on Tuesday, reversing a loss during the year-ago quarter.

Take-Two Interactive is another company likely to replace a quarterly deficit with black ink. It's been mostly all downhill for the video game publisher since its Grand Theft Auto IV smash and rebuffed buyout offer in 2008. Take-Two is likely to post its healthiest profit in nearly two years -- not that it'd take much to do so. The gaming giant has posted losses in four of its past five quarters.

Men's Wearhouse sells suits and rents tuxedos -- potentially a crummy business during market downturns. An optimist may suggest that Men's Wearhouse will fare well as unemployed gents pop in for new duds to wear to their job interviews, but reality is far more pessimistic. Men's Wearhouse has only delivered year-over-year improvement on the bottom line just once since the end of 2007.

Vail Resorts is a seasonal business, as ski buffs pay premiums to stay and slalom at its Colorado resorts during the winter and early spring seasons. Vail Resorts had a disappointing start to the ski season compared to the previous year, but Wall Street sees a strong close to its peak snow season.

A-Power shares seem to go where the wind flows. The wind-turbine specialist has shed nearly two-thirds of its value since peaking in December. The pros are targeting dramatic bottom-line growth at A-Power in Thursday's report, possibly creating an attractive entry point into this beaten down green energy play.

Finally, we have lululemon athletica. The Canadian retailer of high-end yoga wear has been a hit in the United States over the past few years. Pricey activewear won't necessarily fare well during an economic downturn, but lululemon is rocking these days. Comps rose an eye-popping 29% during its most recent quarter. The good times are likely to continue if the recovery doesn't derail.

Cross those fingers, but know the fundamentals
Investors in these seven stocks have a right to be excited. They are all improving their financial situations. They deserve the gains that the market rally has bestowed upon them over the past year.

I wouldn't be uncomfortable owning any of these companies. They're doing the right thing, regardless of Mr. Market's mood swings. The expectations may be high, but these seven stocks wouldn't have it any other way.

Are you a buyer or a seller of stocks these days? Share your strategy in the comment box below.