5 Reasons Not to Worry This Week

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

After a smoking-hot first quarter -- one that found the S&P 500 rising by at least 3% or better in each of its three months -- Mr. Market is taking a breather.

April was a dud, and May is off to an even uglier start.

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

Thankfully, they are 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.

Company

Latest-Quarter EPS (estimated)

Year-Ago Quarter EPS

My

Watchlist

Jamba (Nasdaq: JMBA  ) ($0.06) ($0.11) Add
MAKO Surgical (Nasdaq: MAKO  ) ($0.20) ($0.27) Add
Cisco Systems (Nasdaq: CSCO  ) $0.47 $0.42 Add
SodaStream (Nasdaq: SODA  ) $0.36 $0.27 Add
Universal Display (Nasdaq: PANL  ) $0.05 ($0.08) Add

Source: Thomson Reuters.

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

The parent company behind the 769-unit Jamba Juice chain is spinning like its fleet of fruit-pulping blenders. Jamba's same-store sales have climbed for five consecutive quarters, and it posted back-to-back profitable quarters during last year's spring and summer seasons. That hasn't happened in years.

Analysts are expecting a small deficit when Jamba reports after today's market close, and that's fine. This is a seasonal business. Chilly and nutrient-boosted fruit drinks are better sellers as temperatures heat up. However, losses should continue to narrow during the off-season as the company hands over more of its company-owned stores to proven franchisees.

MAKO is the company behind the RIO robotic arm platform for orthopedic procedures and RESTORIS implants used in its patented MAKOplasty procedures. Squeamish investors may turn away at the sight of red ink, but this is a cutting-edge company that's updating the orthopedic market in an undeniably positive way.

Profitability may be two years away for MAKO at this point, but the top-line growth is undeniable. Wall Street's banking on an 82% pop in the top line, and the deficits should continue to shrink at this point.

Cisco is the networking giant. The tech bellwether's routers and switches connect corporate networks. Cisco has struggled on the consumer side. Competition has been fierce on the enterprise side. However, the pros see Cisco's earnings moving in the right direction these days.

SodaStream is the Israeli company behind the popular namesake beverage maker. SodaStream's simple yet patent-protected appliance turns tap water into carbonated soda. The knee-jerk reaction when the company went public toward the end of 2010 was to dismiss the company as a novelty, but SodaStream has been a hit in overseas markets for years.

SodaStream has blown past Wall Street's bottom-line targets in each of its first four quarters as a public company. We'll find out on Wednesday if it's able to stretch that streak to five.

Universal Display is a pioneer in organic light-emitting diode technologies. The efficient lighting source is starting to gain traction in televisions, monitors, and even smartphones. Rich in OLED patents, Universal Display has been striking lucrative deals for its technology.

Universal Display was losing money for years until it surprised the market with its first quarterly profit six months ago. The black ink continues, and this should be the company's third consecutive quarter of profitability.

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.

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 Motley Fool owns shares of Universal Display, Cisco Systems, MAKO Surgical, and SodaStream International. Motley Fool newsletter services have recommended buying shares of SodaStream International, Universal Display, and MAKO Surgical. 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, except for Jamba. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


Read/Post Comments (4) | Recommend This Article (4)

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 May 07, 2012, at 7:09 PM, Marmadukemark wrote:

    After hours trading brought MAKO to its knees with a 27% decline, after MAKO reported cuts to its outlook on their RIO system. The Fools have been touting this company as THE place to be for a while now. It was just about to my entry point - seriously considering dumping this thing - when BAM they cut their sales forecast, and the price drops more than 27% from yesterday's close. What's tomorrow going to bring for MAKO?

    Is this One Reason To Worry About the Fools?

  • Report this Comment On May 07, 2012, at 7:23 PM, heatman101 wrote:

    Let me make it really simple for all of you out there....the reason the market is down is because the ECONOMY is NOT as good off as everyone WANTED to think that it was!!! Many companies are NOT making the MONEY...market goes DOWN~~SIMPLE first grade math....

  • Report this Comment On May 08, 2012, at 10:00 AM, tokelau wrote:

    I've always held the MF in high esteem, but that's definitely breaking down, you keep plugging stocks (ARCO, TC, MAKO to name a few) that are drowning. Maybe the founders of MF are taking it too easy. When are you getting serious again?

  • Report this Comment On May 08, 2012, at 10:04 AM, tokelau wrote:

    One more thing: you keep ridiculing outfits like Zacks and Jim Cramer. I didn't think much of them either, but i've noticed that of late they are doing a much better job than MF. Please get a hold of yourself.

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