Earnings season is in full swing, and investors can make or lose a bundle depending on the stocks they own. For my money, three of the best blue chip stocks to bank on for a big earnings surprise are Ford (F), Baidu (BIDU) and Express Scripts (ESRX).
Ford (F) took a hit, along with all the automakers, as the recession took hold. But thanks to smart management, Ford was the only member of the Big Three automakers to avoid bankruptcy. That’s not to say it has been an easy ride for the company. It wasn’t until January of this year that the company posted its first annual profit in four years!
Expectations are still low for automakers–including Ford–and that’s why I think the company is gearing up for an earnings surprise when it reports on July 27. Its monthly sales numbers have been strong and it has improved its market share drastically. Analysts have also raised estimates 53% in the last 90 days. All this taken together makes me think Ford could break the $0.40 per share mark when it reports. I would encourage you to buy shares ahead of earnings because its price will shoot higher if it posts a big surprise.
Baidu Inc (BIDU) is another huge company that you should own this earnings season and into the future. BIDU has continued to kick Google’s behind when it comes to Chinese market share (the company says it hopes to control 79% of this market by next year). Last quarter, BIDU posted a whopping 165% surge in net income, to $70.4 million, or $2.02 per share. Sales also rose an incredible 60%, to $189.6 million, blowing past analysts’ expectations and resulting in a +33% earnings surprise. The stock jumped 14% on that news and a repeat this quarter should do the same. That’s why BIDU is one of my 19 top-rated buys in Blue Chip Growth.
Express Scripts Inc (ESRX) is continuing to perform remarkably well. The company’s Q1 profit rose 21%, earning it $260.2 million and beating analysts’ forecasts. Full-year numbers have been on the rise and the company’s recent stock split is a bullish signal. Earnings will be released on July 26 and, considering the company has a history of posting 100%+ surprises, I think it will beat the Street. This stock should have another great quarter and would make a nice addition to any diversified portfolio.
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