7 Reasons Not to Worry This Week

If the recession is getting smaller and smaller in the rearview mirror, why did the FDIC's count of banks that failed this year bump up to 151 over the weekend?

It's not just that, of course. 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.

Source: Thomson Reuters.

Clearing the table
Let's start at the top with FuelCell.

The alternative energy company was so hot a decade ago that it had to split its shares three times during the tech bubble. It's a different story these days, as FuelCell continuously posts quarterly deficits. Tonight's report shouldn't be any different, but the ability to generate electric power from hydrogen-storing fuel cells is too popular to ignore. Narrower deficits are the first steps toward eventual profitability, and this should be the seventh consecutive quarter of year-over-year improvement on the bottom line.

Hovnanian is one of the many homebuilders that appear to be clawing back from the darkest stretches of the residential market's meltdown. We're certainly not out of the timberlands just yet. Developers are facing weak demand for new construction. If consumers aren't jumping into freshly constructed homes given the ridiculously low mortgage rates, this turnaround may take a bit longer. We can still celebrate a little less red ink from the builders.

The Pantry runs a chain of convenience stores through the Southeast. Selling gasoline, beef jerky, and six-packs of beer may not seem like big business, but The Pantry's been able to make accretive acquisitions in a very fragmented sector, pushing its empire up to 1,672 stores at last count.

Speaking of acquisitions, Oracle's Larry Ellison never met a buyout target that he didn't like. Well, I'm sure he has passed over plenty of possibilities, but it certainly does seem as if the enterprise software giant is always announcing a new deal. Oracle was able to grow during the recession when companies were scaling back on their IT spending, so it's not a surprise to see it doing even better now that the climate is gradually improving.

Pier 1 Imports was almost a recessionary casualty. Peddling home furnishings in strip malls threatened to sink the leveraged retailer. Its stock traded for as little as $0.10 in March of last year, and these days it's earning more than that in a single quarter.

Research in Motion is the Rodney Dangerfield of smartphone makers. It truly gets no respect. It continues to pad its base of BlackBerry owners. Analysts are targeting nearly 50% in earnings growth for its latest quarter. Yes, BlackBerry handsets may not be as buzz-worthy as iPhone and Android devices these days, but it's still growing a lot faster than its low earnings multiple may seem to suggest.

Finally, we have Take-Two Interactive. The software publisher is no longer a one-trick pony, thriving only when there's a new Grand Theft Auto installment. Take-Two has scored this year with Mafia II, Red Dead Redemption, and BioShock 2. It came through with an unexpected profit three months ago. This time around, everyone sees it coming.

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.