5 Reasons Not to Worry This Week

After soaring 11.2% during last year's fourth quarter, the S&P 500 is up 11.1% as we head into the final week of this year's freshman quarter.

Could it be? Is the market that many had left for dead a while back about to come through with back-to-back quarters of double-digit percentage gains? Things may not be perfect, but they apparently are more than good enough for Wall Street.

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.

Source: Thomson Reuters.

Clearing the table
Let's start at the top with Family Dollar.

With shoppers trying to get more bang for their buck, it's not much of a surprise to see discounters holding up so well.

Fellow Fool John Maxfield took a closer look at the nuts and bolts of Family Dollar last month, impressed by both its impressive revenue growth and expanding margins. The real surprise with Family Dollar is that the company continues to do well even after the recession keeps getting farther away in the rearview mirror.

Weren't all of the shoppers who traded down to Family Dollar supposed to trade back up? Maybe some have, but Family Dollar is still doing fine by most accounts.

Red Hat is the smart technology provider that managed to turn Linux -- the open-source platform -- into an effectively monetized business. Red Hat sells subscriptions to companies for its support of Linux-based enterprise software solutions. Companies save money over traditional software, and Red Hat clearly makes a good chunk of money, too.

Best Buy is the consumer electronics retailer that's still standing after rival Circuit City liquidated a couple of years ago. Unfortunately for Best Buy, the company has been posting declining profitability in recent quarters.

Analysts see that unfortunate streak coming to an end when it reports on Thursday. It's easy to be skeptical after the retailer's inability to keep pace with the boom in online sales, but clearly Wall Street thinks that Best Buy is turning things around.

TIBCO Software's enterprise niche is business integration process management and optimization. Enterprise software is a big component of improving corporate efficiency, and TIBCO has been a beneficiary.

Bottom-line improvement isn't a novel occurrence here. TIBCO has posted year-over-year earnings growth for eight consecutive quarters.

Finally we have Xyratex, and it isn't on the same kind of winning streak as TIBCO. The enterprise data storage specialist posted three straight quarters of steep declines on the bottom line before bouncing back in its most recent quarter. Analysts see Xyratex taking another step in the right direction on Thursday.

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.