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With a little more than a month of trading left in 2010, one would think that investors are getting the hang of the global volatility that's been moving the markets in different directions lately.
Now that Ireland's getting some outside assistance in tackling its fiscal pickle, is it time to be bullish?
I'll be the first to admit that I had no problem over the weekend, bringing up several companies that are projected to post lower quarterly earnings this week than they did a year ago.
Thankfully, they're the exceptions and not the rule. 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.
Latest Quarter's EPS (Estimated)
Year-Ago Quarter's EPS
|Trina Solar (NYSE: TSL )||$0.87||$0.65|
|Barnes & Noble (NYSE: BKS )||($0.08)||($0.30)|
|OmniVision (Nasdaq: OVTI )||$0.52||$0.27|
|Finisar (Nasdaq: FNSR )||$0.38||$0.11|
|Sigma Designs (Nasdaq: SIGM )||$0.37||$0.09|
|Liquidity Services (Nasdaq: LQDT )||$0.12||$0.03|
|Toll Brothers (NYSE: TOL )||($0.08)||($0.68)|
Source: Thomson Reuters.
Clearing the table
Let's start at the top with Trina Solar.
I'm humbly kicking off the list with the Chinese solar energy specialist because of a personal oversight on Friday. Trina had earned $1.29 a share during last year's third quarter, but the data source I lean on failed to adjust for a 2-for-1 stock split that Trina executed earlier this year. In other words, Trina really earned $0.65 a share on an adjusted basis. It's a relief, since most solar energy companies have been posting blowout results lately. We'll find out if Trina Solar is the next shining star of solar tomorrow.
Barnes & Noble is perhaps the most surprising name on this list. Aren't we all buying more digital books these days? B&N also slashed the price of its Nook e-reader back in June. Isn't that going to gnaw away at the bookseller's margins? The market is still braced for red ink out of B&N, but it should be a substantially narrower deficit. We're also heading into the holiday quarter, which has historically been a strong one for the superstore chain.
OmniVision makes semiconductor image sensor devices. Have you seen a new smartphone or wireless handset that doesn't have a snazzy camera these days? OmniVision is cashing in on the shutterbug trend in the mobile market, even if that eats into demand for imaging gadgetry elsewhere.
Finisar is practically a lock to not only more than triple last year's profitability of $0.11 a share, but to also land well ahead of Wall Street's target of $0.38 a share. Finisar's stock popped a few weeks ago, after the optical networking giant announced preliminary quarterly results. It expects to earn between $0.41 and $0.43 a share on an adjusted basis, but just half of the analysts tracking the company have bothered to officially raise their bottom-line estimates.
Sigma Designs was singled out to Motley Fool Rule Breakers newsletter subscribers three years ago, as the leading chipset maker for Internet protocol TV. The bullish call was unfashionably early, but now web-tethered televisions and IPTV set-top boxes are starting to sell briskly.
Liquidity Services isn't a household name as an auctioneer, but that's entirely by design. The company's flagship marketplace helps the government and other businesses unload excess wares to opportunistic buyers who can purchase in bulk. Things are going pretty well when earnings are projected to pop fourfold.
Finally, we have Toll Brothers. The developer of suburban homes for middle-class and upper-middle-class homebuyers has been clawing its way out of the residential real-estate rut. Three months ago, Toll posted its first quarterly profit in three years. Analysts are settling for a narrower year-over-year deficit this time around, but it wouldn't be a shocker if Toll delivers another quarter of positive earnings.
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 are worthy of 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.