Things are starting to look up in 2012.
The major market indexes have inched higher in all three weeks to kick off the new year, helping distance investors from the flattish ways of 2011.
There are still some rough patches out there. I recently went over some of the companies that are targeted 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.
Latest Quarter EPS (Estimated)
Year-Ago Quarter EPS
VMWare (NYS: VMW)
AMD (NYS: AMD)
Apple (NAS: AAPL)
E*TRADE (NAS: ETFC)
Riverbed Technology (NAS: RVBD)
Source: Thomson Reuters.
Clearing the table
Let's start at the top with VMWare.
Analysts can't seem to agree on the virtualization software leader. A Citigroup analyst downgraded the shares to "sell" earlier this month, fearing a slowdown in VMWare's business and possibly uninspiring revenue guidance when the tech darling reports tonight.
An analyst at Pacific Crest sees it differently, suggesting that investors buy in ahead of the report. Pacific Crest has an outperform rating on the shares and a price target of $106.
AMD is the country's second-largest maker of microprocessors. If your PC or laptop isn't part of the "Intel Inside" collective, it's probably an AMD chip fueling your computing experience.
This may not seem like a good time to be AMD. Sales tracker Gartner recently reported that PC shipments fell 5.9% in this country during the fourth quarter. On a global basis, shipments still fell by a problematic 1.4%. However, Wall Street still sees AMD's top and bottom lines inching slightly higher in tomorrow's report.
Apple did the unthinkable three months ago. The world's most valuable tech company actually missed analyst estimates. It apparently wasn't enough to rattle the prognosticators. The pros have gone from targeting a fiscal first quarter profit of $9.55 a share three months ago to this week's $10.07 a share estimate. October's successful debut of the iPhone 4S finds Apple watchers inching their smartphone shipment targets higher, offsetting any potential weakness on the tablet front during the holidays.
We already know that the E*TRADE baby will be making another appearance during next month's Super Bowl. Before that, we'll find out if the discount broker itself knows how to score when it matters. Mr. Market feels that E*TRADE will post a healthy profit, reversing a year-ago loss.
There doesn't appear to be a reason to be worried. E*TRADE's two larger rivals reported last week, and they both essentially earned what analysts were forecasting.
Finally, we have Riverbed Technology. The market speedster makes networking systems more effective, and that has led to heady growth with the lofty valuation to match.
Riverbed's stock took a hit last month when an industry bellwether slipped, leading investors to dump companies that rely on IT expenditures. However, investors should know that every company is unique. Riverbed has managed to meet or exceed analyst estimates every single quarter since going public nearly six years ago.
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.
VMWare has gone on to beat the market since David Gardner originally singled out the virtualization specialist to Rule Breakers subscribers, but now there's a new multibagger on the growth newsletter's radar. Read up in a free report that's available right now.
At the time thisarticle was published The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple, Riverbed Technology, and VMware. Motley Fool newsletter services have also recommended writing covered calls in Riverbed Technology and creating a bull call spread position in Apple. 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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