It's not a perfect world out there for investors.
The Dow has risen just four trading days this month. Think about that, folks. May is nearly over. The Dow Jones Industrial Average has closed lower in 15 of the month's 19 trading days.
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
|The Fresh Market (Nasdaq: TFM )||$0.36||$0.28||Add|
|RBC Bearings (Nasdaq: ROLL )||$0.62||$0.47||Add|
|Ciena (Nasdaq: CIEN )||($0.03)||($0.24)||Add|
|Joy Global (Nasdaq: JOYG )||$1.95||$1.52||Add|
|Vera Bradley (Nasdaq: VRA )||$0.29||$0.28||Add|
Source: Thomson Reuters.
Clearing the table
Let's start at the top with The Fresh Market.
The high-end grocer has been ambitiously expanding its chain of boutique supermarkets with an old-world European market vibe. With its much smaller footprint than traditional grocery store behemoths, the chain is able to wedge itself into small spaces available within affluent neighborhoods.
Aiming for well-heeled shoppers looking only for the best cuts of meats, freshest produce, and exotic flowers has its advantages. The premium markups find The Fresh Market with industry-envious net margins of 4.6%. This may not seem like a big number, but it's well above traditional supermarkets and even the country's leading organic grocer.
It's not a surprise to see The Fresh Market growing, especially during an earnings season that has seen most consumer-facing luxury brands and retailers posting better than expected results.
RBC Bearings is rolling along nicely. The maker of precision plain, roller, and ball bearings has 23 manufacturing facilities in four different countries. The market's holding out for a strong quarter, with revenue and earnings climbing 16% and 32%, respectively. It's obviously a good sign when profitability is growing twice as fast as a company's top line.
Analysts see Ciena posting a substantially narrower loss when it checks in on Thursday. The networking specialist has had a rough year, falling woefully short of market expectations in three of the past four quarters. However, Wall Street's looking for a dramatic enough reduction in Ciena's quarterly deficit that even a miss this time around should still be an improvement.
Joy Global makes mining equipment. It may not seem like a glitzy business, but there's obviously plenty of digging going on worldwide, especially as emerging economies tap into growing demand for resources.
The prognosticators see Joy Global's net income soaring 28% to $1.95 a share.
Finally we have Vera Bradley on the move. The retailer of stylish luggage, handbags, and other accessories for people on the go went public less than two years ago at $16. It has managed to land ahead of analyst estimates in all but one quarter, but this doesn't mean that it's resulted in happy traveling for investors.
Vera Bradley's shares have shed roughly half of their value over the past year, but hopefully Thursday's report will get the company moving in the right direction again.
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.