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Watch These Companies Closely This Earnings Season

By Keith Speights – Jul 29, 2021 at 9:01AM

Key Points

  • Several companies are especially worthy of watching during earnings season because of hints their results could give about the strength of the overall economic recovery.

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Some have already reported their quarterly results, while others will do so soon.

We're in the thick of earnings season right now. Several big companies have already provided their latest quarterly updates, and more are on the way. In this Motley Fool Live video recorded on July 19, 2021, healthcare and cannabis bureau chief Corinne Cardina and Motley Fool contributor Keith Speights talk about several reports that investors should pay particular attention to this earnings season.

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Corinne Cardina: Earning season is back. What companies, trends, all that good stuff, what should we be watching this earning season?

Keith Speights: Well, obviously, if investors own stocks, watch the earnings for the stocks that you own. But I'll mention several companies that I'll personally be watching closely this earnings season. Intuitive Surgical (ISRG 0.26%) is one that really stands out to me. I see Intuitive Surgical as a great pandemic recovery play. But just how strong that recovery will be with COVID still a major concern, especially with the rise of the delta variant, that's a big question mark, so I'll really be watching to see what Intuitive Surgical has to say.

I'll also watch companies that generate significant revenue from COVID-19 -- for example, COVID-19 testing and vaccines. I would throw Abbott Labs (ABT 0.89%) in there, I would throw Pfizer (PFE 0.74%) in the mix, those are great examples. What these particular companies say -- and don't say -- about their outlook for the rest of the year could be telling in just how concerning the rise of the delta variant and other coronavirus variants might be.

Last but not least, I would pay attention to health insurers. UnitedHealth Group (UNH 1.49%) already beat expectations with its Q2 results. I'm interested to see how CVS Health (CVS 1.20%) looks with its Q2 earnings. The company is interesting in particular to me because it combines several healthcare businesses: It's a big health insurer with Aetna, it's a huge pharmacy retailer, and it's a leading pharmacy benefit manager.

The growth of Medicare Advantage, I think, has been driving the fortunes of health insurers in particular, and I expect that will continue into Q2 and beyond. With any earning season, always look for the big surprises, both positive and negative. They can help identify trends early on that could make a difference in how stocks will perform in the future. So watch out for the surprises and I'm sure there will be plenty this earning season.

Cardina: That's right, and we'll be here to talk about them as they come up.

Keith Speights owns shares of Intuitive Surgical and Pfizer. The Motley Fool owns shares of and recommends Intuitive Surgical. The Motley Fool recommends CVS Health and UnitedHealth Group and recommends the following options: long January 2022 $580 calls on Intuitive Surgical and short January 2022 $600 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Pfizer Stock Quote
$49.21 (0.74%) $0.36
Abbott Laboratories Stock Quote
Abbott Laboratories
$106.96 (0.89%) $0.94
UnitedHealth Group Stock Quote
UnitedHealth Group
$537.62 (1.49%) $7.91
CVS Health Stock Quote
CVS Health
$101.26 (1.20%) $1.20
Intuitive Surgical Stock Quote
Intuitive Surgical
$265.13 (0.26%) $0.68

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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