We are almost at the end of earning season, as 80% of the companies in the S&P 500 have reported earnings. So far, according to the research firm FactSet, we have a blended earnings growth rate of a little more than 8% which is a pretty good performance for corporate America.
The danger in the earnings reports so far is that it looks like a lot of the growth is the result of financial engineering and not increased sales. Revenue growth for the S&P 500 stocks is actually less than 1% year-over-year. In addition, many companies have lowered their guidance for 2015, so investors need to separate the winners and losers this earning season.
You need to focus on those companies that are growing revenues as well as profits, and the ones increasing their outlooks for the rest of the year. Fortunately, we have Portfolio Grader to help you find the very best stocks as earnings season winds down.