5 Reasons Not to Worry This Week

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It's not a perfect world out there for investors.

Even though 81% of the S&P 500 companies that have already reported quarterly profits this season have landed ahead of Wall Street expectations -- according to Thomson Reuters data -- the outlook is still iffy.

Existing home sales fell last month. New claims for unemployment benefits may have declined, but not as much as economists were forecasting. Europe is, well, still being Europe.

I recently went over some of the companies that are expected to post lower quarterly profits when they report this week.   

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

My Watchlist

Apple (Nasdaq: AAPL  ) $10.00 $6.40 Add
Baidu (Nasdaq: BIDU  ) $0.84 $0.47 Add
Crocs (Nasdaq: CROX  ) $0.26 $0.24 Add
Human Genome Sciences (Nasdaq: HGSI  ) ($0.39) ($0.69) Add
Las Vegas Sands (NYSE: LVS  ) $0.59 $0.37 Add

Source: Thomson Reuters.

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

Despite Apple tumbling badly over the past two weeks, analysts continue to inch their projections higher. Three months ago Wall Street figured that Apple would earn just $8 a share during the first three months of this calendar year. Last month that target was up to $9.75 a share, and up yet again to $9.89 a share as of last week. Over the weekend, analysts were forecasting an even $10 a share in earnings when Apple reports tomorrow afternoon.

The trend bodes well for a strong report, even if Apple's stock has taken back-to-back hits over the past two weeks.

Baidu is the dot-com darling of China. The country's leading search engine -- commanding a whopping 78% share of the lucrative market -- has been a market winner, even last year, when many of China's other growth stocks cratered.

The key to Baidu's success has been its stellar growth. The nearly 80% bottom-line growth that analysts expect from Baidu when it reports tomorrow night isn't a fluke. That kind of growth tear is typical of what the Chinese speedster has delivered over the years.

Crocs isn't just about those ugly-yet-comfortable shoes that were all the rage several years ago. Sure, Crocs still makes those hole-filled shoes in loud colors, but head out to the company's website and you'll find stylish golf shoes, heeled pumps, and even boots. Crocs has defied the skeptics that wrote the company off as a passing craze.

Human Genome Sciences turned heads last week, turning down an unsolicited buyout offer from one of the largest drugmakers in the world. The rebuffed offer of $13 a share serves to validate the profitless company. Yes, Human Genome Sciences isn't expected to turn a profit when it reports on Wednesday -- but at least the deficits are narrowing.

Finally we have Las Vegas Sands. The casino operator has attracted growth investors given its prominent role in the red-hot Macau gaming scene. The fundamentals are proving that the house always wins. Wall Street sees revenue climbing 23% -- and earnings soaring by an even more impressive 59% -- when Las Vegas Sands reports on Wednesday.

Cross those fingers, but know the fundamentals
Investors in these five 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 five stocks wouldn't have it any other way.

Fool co-founder David Gardner has been behind some of these winning picks, but now there's a new multibagger on his growth newsletter's radar. Read up in a free report that's available right now

The Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple and Baidu, as well as creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

Read/Post Comments (2) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 23, 2012, at 10:23 AM, dwilh51183 wrote:

    Apple will have a bad report w slowing sales it's a great company but expectations are too high and they will lead all of tech lower. Aapl will trade at 450 again soon. Sell all your stocks by tomorrow. Aapl will get clobbered by 75-95 $$ per share

  • Report this Comment On April 24, 2012, at 10:51 PM, cp757 wrote:

    dwith51183 I guess you lost money on your short position on APPL but thats the name of the game.You can make up the money you lost on LVS. KeyBanc sees EPS of 65 cents amid "operating trends, increasing market share in Macau and growth in Singapore." The firm stated, "Las Vegas Sands [recently] opened its important Sands Cotai Central project in Macau...which will be the last casino to open in Macau for the next three to four years. LVS has strong cash flow to pay for future growth projects in Macau and additional opportunities in Asia, Europe and the United States. In addition, LVS has the ability to pay down a considerable chunk of debt over the next few years, even after paying its newly initiated dividend. Macau and Singapore should continue along their growth planes, and an improving U.S. economy and consumer would help to boost results in Vegas and Pennsylvania."

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Rick Munarriz

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.

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CROX $10.90 Up +0.29 +2.73%
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