We are at about the midpoint of earnings season, and so far, things look pretty good. According to research firm FactSet, the blended earnings growth rate of the S&P 500 is above 7% year over year. About 81% of the S&P 500 companies that have already reported have beaten the consensus estimates, which is the best earnings beat in four years.
So, companies are doing a lot better than somewhat gloomy Wall Street analysts expected in the third quarter. The people running corporate America are also becoming even more optimistic about the future as October was the first time since November 2011 that more companies guided expectations higher rather than lower for the next few quarters.
Looking over the FactSet data, the tech and healthcare sectors have been leading the way this earnings season while energy and material are lagging as the commodities market continue to be weak. Continued credit improvement has been driving gains in the financial sector particularly the smaller regional banks that have been favored in Portfolio Grader for some time now.
Those companies that get high marks from Portfolio Grader are showing strong revenue and profit growth and blowing expectations out of the water. Investors who used Portfolio Grader to find the very best stocks as we entered earnings season are seeing fantastic gains this earnings season. We are seeing solid gains in growth stock portfolios as these strong companies continue to lead the stock market higher.
Here are three examples of strong stocks that offer security products posting superb Q3 earnings:
Vasco Data Security International (VDSI)
Vasco Data Security International (VDSI) makes digital security systems that help businesses protect their data and their networks. Digital security is a high-demand business today, and Vasco has seen great results as demand has been steadily increasing.
VSDI stock has been rated a “strong buy” since posting great results back in July, and in the third quarter, Vasco delivered huge numbers for investors. Vasco reported earnings of 28 cents per share. Analysts had expected Vasco to earn just 10 cents per share.
So, Vasco delivered a huge positive earnings surprise of 180%!
Strattec Security (STRT)
Strattec Security (STRT) sells a different type of security system. Strattec Security make security systems that control access to cars such as mechanical or electronic locks and keys, ignition locks and door handles.
Business is booming and Portfolio Grader has ranked Strattec Security stock a “strong buy” since July, and Strattec Security delivered on that high ranking with the latest earnings report. Strattec Security ’s profits exploded to $2.55 a share compared to just 91 cents per share in Q3 2013. Analysts were only looking for just $1.40 a share in profits.
So, Strattec Security had a an 82% positive earnings surprise!
Federated National Holding (FNHC)
Federated National Holding (FNHC) also sells a type of security as it is in the insurance business. Federated National sells homeowners, flood, general liability and auto insurance in Florida.
Federated National has been ranked a “strong buy” for a year now and its latest earnings report shows why yet again.
Federated National reported earnings of 53 cents per share, compared with just 41 cents per share last year. Wall Street was looking for just 40 cents per share.
So, Federated National posted a 40% positive earnings surprise.
Louis Navellier has seen booms, plunges and meltdowns (and everything in between) over the last 15 years as editor of the popular Blue Chip Growth investing advisory. Since launching Blue Chip Growth in 1998, he has generated returns of 345% versus the S&P’s 96%, beating the market by more than 3 to 1. Using a combination of quantitative and fundamental analysis, Mr. Navellier identifies the high-quality stocks that will give his readers market-beating returns — in all market conditions. His latest analysis has uncovered five stocks that will weather the coming market volatility and rebound strongly, handing investors who get in now double- and triple-digit returns. You can find complete details here in his latest Special Report: 5 Rotation Rally “Return Giants” That Can Crush Volatile Markets. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
