5 Reasons Not to Worry This Week
Things are starting to look up in 2012.
Consumer confidence is rising, and the S&P 500 is at a three-year high. It's not all perfect, though. After four consecutive months of gains, new-home sales fell last month.
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.
Latest Quarter EPS (Estimated)
Year-Ago Quarter EPS
|Human Genome Sciences (NAS: HGSI)||($0.43)||($0.46)||Add|
|priceline.com (NAS: PCLN)||$5.05||$3.40||Add|
|ZAGG (NAS: ZAGG)||$0.20||$0.13||Add|
|Domino's Pizza (NYS: DPZ)||$0.49||$0.40||Add|
|Costco (NAS: COST)||$0.87||$0.79||Add|
Source: Thomson Reuters.
Clearing the table
Let's start at the top with Human Genome Sciences.
The DNA specialist isn't profitable, but analysts do see the company posting a narrower deficit when it reports today after the market close. Yet not everyone is convinced here; Collins Stewart's analyst downgraded Human Genome Sciences on Thursday, slashing its price target from $17 to $10.
Flying higher than rival travel portals, priceline.com has stood out as the class act among travel-booking websites. Priceline managed to grow even during the darkest recessionary days, and this isn't even a stateside story stock anymore. International operations accounted for 79% of the dot-com giant's gross bookings in its previous quarter.
Where will Priceline grow from here if it's already taking advantage of global opportunities? Well, one would think that consumers and corporations will travel more once the economy improves. Even now, the growth is impressive. Analysts see Priceline earning $5.05 a share in its latest quarter, nearly 50% higher than its profitability a year earlier.
ZAGG makes protective covers and other third-party accessories for popular smartphones and tablets. Its top product is invisibleSHIELD, a thin film that affixes to mobile gadgetry. As strong and scratchproof as device manufacturers claim their products are, everyone knows how easy it is to scratch or crack a costly piece of hardware.
ZAGG is trying to stand out for more than just invisibleSHIELD, scoring recent retail wins in getting more of its accessories into stores. Ma Bell recently began stocking its ZAGGkeys FLEX standalone keyboard and ZAGGsparq battery charger in its stores.
There were plenty of iPhones sold during the holiday quarter, so it should be a strong period for ZAGG as well, but we'll have to see what the company has to say about it when it reports later today.
Domino's Pizza checks in tomorrow. It's a surprise to see the pizza giant here. It's been blasting cutthroat promotions, selling two medium pizzas for a mere $5.99 each. A new promo tacks on parmesan bread bites -- quite tasty, actually -- for just a buck more.
Finally, we have Costco reporting on Wednesday. Warehouse clubs have proven their recession-resistant mettle. When times are tight, buying groceries in bulk makes sense.
Costco did make a gutsy call in October when it decided to increase the price of its annual memberships by 10% to $60. Would bargain seekers be open to spending more in the pursuit of saving more? Analysts seem to think that Costco shoppers aren't flinching.
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.
At the time this article was published The Motley Fool owns shares of Domino's Pizza and Costco Wholesale.Motley Fool newsletter serviceshave recommended buying shares of priceline.com and Costco Wholesale.Motley Fool newsletter serviceshave recommended creating a write writing naked calls position in ZAGG. 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 the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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