7 Reasons Not to Worry This Week

Despite moving markedly higher in three of last week's five trading days, stocks closed out the week significantly lower.

Welcome to cruel math of sharp volatility!

This isn't the only reason to get woozy.

I went over several companies going the wrong way on Friday, projected to post lower quarterly earnings this week than they did a year ago.

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 Home Depot.

It may be hard to picture the home improvement superstore chain growing these days. The real estate market continues to search for a bottom. There are too many homeowners that own more on their mortgages than their houses are worth, so who wants to invest in improving a property that may be easier to surrender to the bank?

The evidence isn't simply anecdotal. Last month, we had the leaders in hardwood flooring and wood-alternative patio decking get socked after hosing down their near-term outlooks. Why should the folks donning the orange aprons hold up any better? Well, the pros do see Home Depot posting respectable bottom-line growth when it reports tomorrow.

Jamba lives for quenchable heat. The company behind the popular Jamba Juice smoothie chain usually posts losses during the wintry months, only to bounce back when folks clamor for its boost-infused fruit drinks as temperatures creep higher during late spring and summer. The rub for Jamba is that it's been posting losses on an annual basis for a couple of years now. Wall Street doesn't see that trend reversing until next year, but at least it's moving in the right direction now.

Wal-Mart is another surprising name on this list. The world's leading retailer has posted eight consecutive quarters of negative same-store sales. Low prices aren't enough for shoppers these days, apparently. However, analysts do see Wal-Mart making it all work out on the bottom line when it reports its quarterly results tomorrow morning.

JDS Uniphase is hoping to buck the trend that has stung some of its optical networking peers earlier this year. It did post better-than-expected results in its previous quarter, so the trend is its friend heading into Wednesday's report.

NetEase.com is China's leader in online games. Whether it's the company's in-house multiplayer fantasy diversions or the licensee of World of Warcraft in China, NetEase has been able to grow even as many of its smaller rivals have struggled. It's also pretty cheap, fetching just 14 times this year's projected earnings and 12 times next year's target. That's not much at all for a company pegged to grow its profitability by 32% this year.

J.M. Smucker isn't just about the signature fruit jellies. From coffee (Folgers) to pancake mix (Hungry Jack), Smucker plays a bigger role on the breakfast menu. Wall Street sees only marginal income improvement out of Smucker, but keep in mind that the food giant has topped analyst estimates for 12 consecutive quarters.

Finally, we have salesforce.com. The enterprise software company was riding the cloud computing movement before cloud computing was cool. Its ability to deliver cost-effective solutions to companies of its truly portable server-stored software has made it a fast-growing darling with businesses and investors. The market's looking for only marginal bottom-line growth this time, but it is coming on what the pros expect to be a 34% spike in revenue.

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 comment box below.

At the time thisarticle was published The Motley Fool owns shares of Wal-Mart. Motley Fool newsletter services have recommended buying shares of NetEase.com, salesforce.com, Home Depot, and Wal-Mart, as well as creating a diagonal call position in Wal-Mart and shorting salesforce.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.Longtime Fool contributor Rick Munarriz prefers to look at the bright side of life -- and strife. He does not own shares in any of the companies in this story. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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