5 Reasons Not to Worry This Week

It's not a perfect world out there for investors, but things may be starting to get better.

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.

Source: Thomson Reuters.

Clearing the table
Let's start at the top with RF Micro Devices. The maker and designer of radio frequency components is expected to post a quarterly profit of $0.06 a share, three times what it earned a year earlier. This doesn't mean that RF Micro's business itself is tripling. Analysts are banking on a modest 9% increase in revenue. However, even that is reasonable improvement.

Intuitive Surgical has revolutionized the operating table with its da Vinci surgical system that uses a robotic arm that is manned by a surgeon. The system provides precise incisions for a growing number of procedures, making hospitals more efficient by reducing surgeon fatigue, increasing the number of procedures that can be performed, and often lowering the recovery time for patients. It's a win-win-win scenario, even in these volatile times for health care.

The stock isn't cheap. Intuitive Surgical shares are fetching 34 times this past year's earnings and 29 times Wall Street's forecast for 2013. Yes, Intuitive Surgical has never been cheap, but growth has been decelerating. Analysts see revenue and earnings climbing 17% and 19%, respectively, in 2013. Is that strong enough to justify the lofty profit multiple? History argues that the company has earned its healthy market premium. We'll see how things play out after this afternoon's report.

8x8 -- a provider of PBX telephony, video conferencing, and other Web-based communication services -- is also moving in the right direction. Wall Street's banking on a 17% pop in revenue at 8x8 when it reports on Thursday. The $0.05 a share that the pros are targeting on the bottom line is also a pretty safe bet. 8x8 has met or exceeded income projections in each of the past four quarters.

Select Comfort is the company behind the Sleep Number bed. The air-chambered mattress with customized firmness settings is a unique product in a niche where traditional box-spring mattresses and form-fitting memory foam beds are the norm.

All three of the major publicly traded mattress companies are reporting this week, and Select Comfort stands alone as the top dog in terms of growth. One rival is expected to post another quarterly deficit, and the other is expected to post sharp declines on both ends of the income statement. Select Comfort's sleeping pretty, with the market sleeping on expectations of revenue and earnings climbing 21% and 19%, respectively.

Finally, we have Starbucks serving up what should be another caffeinated quarter. Yes, Starbucks stumbled a couple of years ago. The initial stages of the recession freeze-dried traffic, and the baron of baristas actually had to close stores.

It's a different world for Starbucks these days, and the seemingly saturated domestic market will actually be getting a lot of new stores in the coming years. Starbucks has also made acquisitions in the juice bar and tea retail segments, and it's just starting to scratch the surface of potential in those new markets. No one should be surprised to see Starbucks growing again.

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.

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The article 5 Reasons Not to Worry This Week originally appeared on Fool.com.

Longtime Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends Intuitive Surgical and Starbucks. The Motley Fool owns shares of Intuitive Surgical and Starbucks. 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.

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