7 Reasons Not to Worry This Week
Things aren't always pretty out there, though the market has had a pretty good run so far in October. We still have a long way to go before making back the third-quarter losses.
I recently went over some of the companies posting lower quarterly profits and hosing down their near-term outlooks.
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.
Latest Quarter EPS (Estimated)
Year-Ago Quarter EPS
|Harley-Davidson (NYS: HOG)||$0.76||$0.40||Add|
|Intuitive Surgical (NAS: ISRG)||$2.76||$2.14||Add|
|New Oriental Education (NYS: EDU)||$0.57||$0.40||Add|
|Buffalo Wild Wings (NAS: BWLD)||$0.59||$0.47||Add|
|E*TRADE (NAS: ETFC)||$0.18||$0.03||Add|
|Select Comfort (NAS: SCSS)||$0.27||$0.19||Add|
|Chipotle Mexican Grill (NYS: CMG)||$1.85||$1.52||Add|
Source: Thomson Reuters.
Clearing the table
Let's start at the top with Harley-Davidson.
Forking over big money for a shiny new Harley may seem like a luxury in this dicey economic climate, but the Hog farmer has had no problem selling its motorcycles lately. Revenue's been climbing in recent quarters, and net income is following along for the ride.
From Sturgis to surgeons ... Intuitive Surgical has reinvented the operating room with its da Vinci arm. Introducing surgical robotics into a couple of common procedures is improving hospital efficiency and recovery times, and even helping with surgeon fatigue. There will naturally be concerns that health-care reform will dry up spending on some aspects of medical care, but Intuitive Surgical's benefits have clearly been outweighing its implementation costs.
New Oriental Education is a private educator in China, making the most of the growing middle class that wants to give children a leg up in the schooling process.
Buffalo Wild Wings dodged a bullet when the NFL lockout was lifted in time for a full regular season. It won't be as fortunate with the NBA, but the chain of family friendly sports bars known for their namesake chicken wings shouldn't have a problem finding college or pro sports programming to draw the hungry and thirsty over the next few weeks.
E*TRADE is the discount broker with the chatty baby ads. Things seemed bleak for the discounter a couple of years ago when its problematic home loans dinged up financials during the subprime mortgage meltdown. E*TRADE hasn't had a problem turning a profit lately, and this week will build on that bottom-line growth.
Select Comfort makes the Sleep Number air-chambered mattresses that let bed owners dictate the firmness of their slumbers. Shares of Select Comfort traded for as little as $0.20 a share two years ago, when declining same-store sales and faltering profitability threatened its very existence. Select Comfort is trading in the teens now, making it one of Wall Street's biggest winners in that time.
Finally we have Chipotle Mexican Grill. The burrito roller has been able to keep its store-level sales positive, even during the darkest recessionary stretches. A growing fan base and popular "food with integrity" mantra have played well at a time where many other quick-service restaurants have fumbled.
The ability to keep growing sales at Chipotle is only part of the equation. Chipotle's earnings climbed just 9% in its previous quarter, as rising food inflation costs ate into margins. Chipotle has gone on to bump prices higher, passing on the bubbling ingredient costs to its burrito holders.
Cross those fingers, but know the fundamentals
Investors in these seven 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 seven stocks wouldn't have it any other way.
Are you a buyer or a seller of stocks these days? Share your strategy in the comments box below.
At the time this article was published The Motley Fool owns shares of Buffalo Wild Wings and Chipotle Mexican Grill.Motley Fool newsletter serviceshave recommended buying shares of Chipotle Mexican Grill, Buffalo Wild Wings, New Oriental Education & Technology Group, Select Comfort, and Intuitive Surgical. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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