7 Reasons Not to Worry This Week
Things aren't always pretty out there.
Between new obstacles in Greece and familiar problems everywhere else, the global economy isn't getting any better these days. There have also been plenty of implosions this earnings season, and we're probably not done yet.
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
|Perfect World (NAS: PWRD)||$0.67||$0.60||Add|
|Zale (NYS: ZLC)||($1.42)||($1.60)||Add|
|Chico's FAS (NYS: CHS)||$0.20||$0.16||Add|
|China Real Estate Info (NAS: CRIC)||$0.13||$0.10||Add|
|Patterson (NAS: PDCO)||$0.46||$0.45||Add|
|Deere (NYS: DE)||$1.43||$1.07||Add|
|China Digital TV (NYS: STV)||$0.18||$0.17||Add|
Source: Thomson Reuters.
Clearing the table
Let's start at the top with Perfect World.
The online gaming company in China reports tonight (or tomorrow morning, for those playing in Beijing). The company has had a rough year, making the former Rule Breakers stock pick a timely sell recommendation at $29.43 last year. After four consecutive quarters of posting year-over-year declines in profitability, Perfect World turned things around three months ago. The pros see an encore performance now.
High-end jewelers got off to a bad start this month, and Zale is the first of three major publicly traded jewelry retailers that will report quarterly results before the end of the month. The bad news is that Zale is still losing money. The good news is that Wall Street is banking on a slightly narrower deficit as we head to the telltale holiday shopping season.
Chico's FAS is the retailer behind Chico's, White House | Black Market, and Soma Intimates concepts. It closed on its acquisition of direct marketer Boston Proper in September. Many apparel retailers have felt the pinch of consumers holding their disposable income tighter, but at least Chico's is moving its bottom line in the right direction.
China Real Estate Information is the combination of the online real estate properties of one of the country's leading agencies and a dot-com giant. There has been some serious air squeezed out of the world's most populous nation's property value bubble, but China Real Estate Information is pegged to post a 30% improvement in net income.
Patterson is a leading provider of consumable products used in the dental industry, though it also serves the veterinarian and rehabilitation industries. This would seem like an all-weather specialty -- a toothache is a toothache -- but surely there must be people out there holding back on routine cleanings because they are either out of work or not finding dental coverage as companies scale back their medical plans.
John Deere's agricultural gear seems like a clearer all-weather niche. Folks have to eat, and farms need to be tended to in order to make that happen. As emerging markets continue to develop -- even with the global economic malaise -- Deere should fare well.
Finally, we have China Digital TV. As the leading provider of "smart cards" that connect set-top boxes and televisions to digital cable services in China, this has always seemed like a thinking investor's play on China's growing middle class.
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 this article was published Motley Fool newsletter services have recommended buying shares of China Digital TV Holding. 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 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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