5 Reasons Not to Worry This Week

It's not a perfect world out there for investors, but things may be starting to get better.

Sure, the market tanked last week on fears that tax policies next year will work against the allure of investing. The fiscal cliff -- and with it the estimated $600 billion in tax hikes and spending cuts that kick in come 2013 -- is real.

However, does anyone really believe that either political party will let that happen? The recovery is just starting to gain momentum, and both parties -- yes, even the Republicans -- stand little to gain if things come undone over the next four years.

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 Cisco.

The networking equipment giant used to be a more valuable company. For a brief moment in time -- just before the dot-com bubble popped -- Cisco actually commanded the highest market cap in the country.

Well, things didn't work out so well for Cisco after that. The end of the dot-com bubble forced more realistic valuations of the companies arming the online revolution through connectivity hardware. Throw in a few more recent Cisco shortcomings on the consumer end of the market, and Cisco shares have been stuck in the teens since April.

Cisco naturally felt the pinch during the recent recession, but Tuesday should birth the company's fifth straight quarter of year-over-year improvement.

Home Depot straps on the orange apron to report on Tuesday. Wall Street sees improvement at the home improvement leader. We have also had a couple of strong reports earlier this season out of the country's leading player in wood-alternative decking and the top dedicated retailer of hardwood flooring.

This may naturally bode well for Home Depot, but let's not jump to conclusions. Lowe's (LOW +3.61%) -- Home Depot's closest competitor -- is expected to post flat earnings growth on flat sales growth when it reports next week.

Horizon Pharmaceuticals also checks in on Tuesday. Analysts see a deficit of $0.48 a share, but that would be less than half as much as the deficit that it posted a year earlier. The stock took a hit back in September when it had to price a larger-than-expected secondary offering at a larger-than-expected discount, but biotechs can never have too much money until they hit their stride as profitable and established drug companies.

Velti is the one company on this list that's supposed to reverse a year-ago loss with a quarterly profit. Mobile advertising is hot, and Velti's a big player. The future will have to determine how effective mobile marketing is -- and what it's ultimately worth -- but for now it's welcome to see analysts eyeing a profit here on a 63% surge in revenue.

Finally, we have Dollar Tree. Analysts see the popular chain of dollar stores earning $0.49 a share. That's just ahead of the $0.44 a share it rang up last year, but it's easy to imagine things being even better than that. You actually have to go all the way back to the holiday quarter of 2008 to find the last time that Dollar Tree didn't beat Wall Street's profit target.

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.