5 Reasons Not to Worry This Week

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

Things are so bad out there that the Dow -- after posting huge gains during this year's first quarter -- is now in negative territory for 2012.

Ouch.

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 Shuffle Master.

True to its name, the company is the leading maker of automatic card shufflers. It also manufactures roulette chip shufflers, casino table games, and other gaming industry essentials. Shuffle Master reports today after the market closes. Analysts see a 43% surge in profitability on a mere 9% top-line advance. If that seems aggressive, keep in mind that these same Wall Street professionals have underestimated the company's earnings power in each of the three previous quarters.

Fuel Cell Energy reports tomorrow. The maker of eco-friendly power plants has been posting quarterly deficits for years, so another loss tomorrow won't come as much of a surprise. However, analysts see the company only losing half as much as it did a year earlier.

FuelCell Energy has been posting narrowing deficits in each of the six previous quarters. Slowly but surely, the company is powering its way toward breakeven.

Ulta Beauty -- which thankfully shortened its name from its earlier Ulta Salon, Cosmetics & Fragrance moniker -- also reports tomorrow. The chain of 467 stores that do double duty as both a full-service hair salon and a retailer of beauty-care products has been a growth investor darling for years. Wall Street's banking on a 43% pop in profitability on a 23% surge in sales growth.

Hovnanian Enterprises is a homebuilder. Naturally, the past few years have been tough for real estate developers. If there's a glut of existing homes on the market and gun-shy lenders are hesitant about approving mortgages unless buyers have chunky down payments, you can imagine that demand for new construction isn't exactly booming these days.

There are some signs that the housing industry has finally bottomed out, though that is also largely the byproduct of historic low lending rates. The moment that interest rates begin inching higher, home affordability is going to take a hit unless the economy is growing even faster.

Another loss from the homebuilder is likely in the cards. Hovnanian has only had one profitable quarter since 2007. The key here is that -- just as we should be seeing with FuelCell Energy -- the pros see the company losing roughly half as much as it did a year earlier.

Finally, we have Exide Technologies. The lead-acid battery maker announced last week that it would be closing a battery recycling plant in Texas, and selling the 180 acres of surrounding land in a $45 million deal. It will probably discuss the transaction when it reports its latest quarterly results. A profit, reversing a year-ago loss, is expected.

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.

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