3 Big Winners From Earnings Season

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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.

earnings-season-winnersThe 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.

Packaging Corporation of America (PKG)

earnings-season-winnersPackaging Corporation of America (PKG) manufactures and sells containerboard and corrugated packaging products for industrial and consumer markets in the United States. Its products are used to pack and ship goods and are used in promotional displays for retail locations.

The company has seen its earnings surge in the past year, with profits up more than 100%. The company is seeing strong sales growth, as well, as sales have leaped ahead by more than 70%. In the latest quarter, PKG reported profits of $1.04 per share, compared to last year’s 61 cents per share. Net sales were a record $1.3 billion in the fourth quarter, compared to $737 million last year.

The company also said it expects strong results in 2014. The continued improvement in the fundamentals are reflected in Portfolio Grader, and the stock is still a “strong buy” with an “A” ranking.

Patrick Industries (PATK)

earnings-season-winnersPatrick Industries (PATK) just posted its fourth consecutive earning surprise, and it looks like business has turned the corner for the wood products company. PATK makes building products and materials primarily for the recreational vehicle, manufactured housing, and industrial markets. Its products include decorative panels, cabinets, moldings, interior doors and furniture.

Sales for the fourth quarter of 2013 increased by 38.1% while earnings grew 87% year-over-year. The company also announced that it was increasing its share buyback program to $20 million this year. Analysts have recently raised their estimates for PATK for both this year and 2014. The rapid improvement in the fundamentals led Portfolio Grader to upgrade PATK stock to an “A” this week, and it remains a “strong buy” right now.

Spirit Airlines (SAVE)

earnings-season-winnersSpirit Airlines (SAVE) has carved out a niche for itself, offering super low fares for 250 daily flights to more than 50 destinations in the U.S., Latin America and the Caribbean. The company just reported a huge quarter with earnings leaping ahead by over 100% while revenues grew by 27% compared to 2012.

Business has been much better than Wall Street expected, and Spirit has posted four consecutive positive earnings surprises. Analysts are raising their estimates for 2014 and 2015. The continued improvement in the fundamentals of the low-cost carrier is reflected by Portfolio Grader. The stock was upgraded to an “A” last month and remains a “strong buy” today.

Louis Navellier is the editor of Blue Chip Growth.


Article printed from InvestorPlace Media, https://investorplace.com/2014/02/earnings-season-winners/.

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