5 Reasons Not to Worry This Week


It's not a perfect world out there for investors.

Greece is still a mess. Investment banks are still making risky wagers. Oh, and Facebook's IPO isn't exactly a lock to happen later this week.

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



Deere (NYS: DE)




Netlist (NAS: NLST)




Red Robin (NAS: RRGB)




Staples (NAS: SPLS)




Wal-Mart (NYS: WMT)




Source: Thomson Reuters.

Clearing the table
Let's start at the top with Deere.

Deere reports on Wednesday. The pros see a profit of $2.53 a share out of the agricultural-equipment giant. Investors will be encouraged to know that Deere has bested analyst prognostications every single quarter over the past year, so you have to like the company's chances of growing its bottom line by more than the 19% the market was banking on.

Netlist -- a maker of memory subsystems for server and storage applications for cloud computing -- reports today. Analysts see a quarterly deficit of $0.05 a share, but that's half of the loss it posted a year earlier.

Don't be surprised if the small tech company puts up an even smaller deficit. Netlist has beaten Wall Street expectations by at least 69% in each of the past three quarters.

Red Robin Gourmet Burgers runs a casual dining chain. Don't confuse this "gourmet burgers" joint with the quick-service, counter-pickup, "better burger" eateries that are popping up everywhere these days. There are certainly plenty of signature burgers on the menu, but Red Robin will serve them -- and items from a much wider menu -- at your table.

Red Robin is also a name mentioned as a buyout candidate in an industry that has seen a healthy pace of consolidation these days. None of that will matter on Wednesday. Wall Street sees modest improvement on the chain's bottom line.

Staples is the country's leading office supplies superstore chain. Comps were flat last year, but they did turn positive toward the end.

Staples is naturally a great proxy for the state of "Corporate America." If small- and medium-sized businesses are growing to the point that they're spending more on toner cartridges and desk chairs, you'll see it in this retailer's numbers.

Finally, we have Wal-Mart. The world's largest retailer seems to be a no-brainer investment. Who can resist low prices? Surprisingly, Wal-Mart's been posting a lot of quarters with negative same-store sales over the past few years. Win or lose at the store level, at least Wal-Mart's likely to inch its profitability higher when it reports on Thursday.

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.

David Gardner has been behind some of these winning picks, but now there's a new multibagger on his 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 Red Robin Gourmet Burgers and Staples. Motley Fool newsletter services have recommended buying shares of Staples. Motley Fool newsletter services have recommended creating a diagonal call position in Wal-Mart Stores. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.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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