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.

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.

The thrift store chain has been magnetic over the years to shoppers looking for deep discounts on basic goods. There are more than 7,500 locations across 45 states, making Family Dollar one of the country's largest retailers.

Despite fears that a gradually improving economy would find Family Dollar shoppers trading up to discount department stores or perhaps even traditional department stores, Family Dollar is holding up just fine. Wall Street sees top- and bottom-line growth in the low double digits when the retailer reports on Thursday.

Sonic watches over its chain of fast-food restaurants. The retro charm of ordering from a parked car and the occasional roller-skating carhop is gimmicky, but it also helps Sonic operate a lean eatery with minimal overhead. The small-box model also explains why investors can get plenty of low-priced eats and treats.

Sonic has had its ups and downs over the years, but this time at least Wall Street's holding out for modest bottom-line improvement.

UniFirst suits up more than 1.5 million workers with workplace uniforms. The company also offers other workplace consumables including restroom products, floor mats, and cleaning supplies. It may be surprising to see UniFirst growing, especially in light of companies holding back on hiring or taking on new expenditures.

The pros see UniFirst checking in with a profit of $1.33 a share, a marginal improvement from the $1.30 a share it earned a year earlier. But don't be surprised if UniFirst winds up earning more than $1.33 a share. It has beaten Wall Street's profit targets consistently for six consecutive quarters, so the chances are better than fair that it stretches that enviable streak to seven quarters when it reports on Thursday.

Next we have Franklin Covey. Providing consulting and training services in the areas of strategy execution, customer loyalty, leadership, and individual effectiveness is apparently in demand. Franklin Covey's Rolodex claims 75% of the Fortune 500 companies as clients.

Analysts see Franklin Covey growing its revenue at a reasonable 11% clip, but expanding margins are expected to deliver a better than 55% pop in profitability.

Finally we have Calavo Growers. Sure, Calavo procures and markets fresh items from tomatoes to tropical produce, but its flagship product is the avocado. Calavo also whips up those same avocados into guacamole and guacamole-based hummus.

Now Calavo doesn't pre-announce its earnings date, but it has reported its fiscal-fourth-quarter results during the first week of January in each of the past four years. History would dictate that it checks in with investors toward the end of the week.

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.