You know that something demonic has taken over the market when the Nasdaq composite plunges a few basis points shy of 6.66% last week.
Don't call in an exorcist. At this point, it's anyone's guess as to how the global crisis -- particularly here and in Europe -- gets cleaned up.
I went over several companies going the wrong way on Friday, 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 some publicly traded companies that are expected to stand tall this week by posting year-over-year improvement on the bottom line.
Latest Quarter EPS (Estimated)
Year-Ago Quarter EPS
|Perfect World (Nasdaq: PWRD )||$0.57||$0.55||Add|
|Nepstar (NYSE: NPD )||$0.01||($0.02)||Add|
|Hain Celestial (Nasdaq: HAIN )||$0.33||$0.26||Add|
|Applied Materials (Nasdaq: AMAT )||$0.33||$0.29||Add|
|Aruba Networks (Nasdaq: ARUN )||$0.17||$0.10||Add|
|Krispy Kreme (NYSE: KKD )||$0.06||$0.03||Add|
|OmniVision (Nasdaq: OVTI )||$0.72||$0.39||Add|
Source: Thomson Reuters.
Clearing the table
Let's start at the top with Perfect World.
The Chinese online gaming company reports tonight. Perfect World has come up short against expectations in two of the past four quarters, but it's an awfully tempting value now that it's growing again. The shares are trading for just seven times this year's projected profitability and a mere six times next year's target.
Nepstar is also in China. A drugstore chain in the world's most populous country would sound like a slam dunk, but it's only expected to post the smallest of quarterly profits tomorrow. The important thing for Nepstar is that even microscopic earnings are better than the deficit it posted a year earlier.
Hain Celestial is the company behind many popular organic and healthy foodstuff lines including Terra veggie chips, WestSoy soymilk, and Celestial Seasonings teas. Upscale organic grocers have been on a roll lately, so why not Hain Celestial?
Applied Materials is only expected to grow its net income by 14%, but the pros have been underestimating the chip equipment maker lately. Applied Materials has beaten Wall Street guesstimates in each of the five previous quarters.
The market is banking on Aruba Networks to deliver healthy bottom-line growth this week, but you wouldn't know it by the 29% plunge in the stock last week. Then again, the market's been souring on networking stocks given the gloomy outlooks provided by the companies in the field that have already reported.
Krispy Kreme is obviously best known for its sugary doughnuts. Cynics will argue that consumers should know better than to dive into the unhealthy treats, but Wall Street does see Krispy Kreme's quarterly earnings doubling this time around.
Finally, we have OmniVision Technologies, a major maker of semiconductor image sensors devices. Folks aren't snapping up digital cameras the way they used to, but that's because cell phones and now even tablets can turn users into shutterbugs. OmniVision is all over that, and it shows. Analysts are looking for net income of $0.72 a share in Thursday's report, well ahead of the $0.39 a share it earned a year ago.
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 comments box below.