In a nutshell, the strong U.S. dollar is the main culprit behind the recent market swings.
The appreciating dollar weighs not only on commodity prices but also on the overseas sales of multinational companies, which you can read more about in my Blue Chip Growth investing advisory.
My intention isn’t to scare you away from stock investing. The fact is that the S&P 500 still yields quite a bit more than the bank and money market investments.
So, it really is the last haven for yield-seekers. While the deflationary environment has made some investors nervous, my long-term outlook for the market remains upbeat as I expand on in my Blue Chip Growth investing advisory.
Here are three stocks with good reasons to be upbeat:
Foot Locker, Inc. (NYSE:FL)
Foot Locker, Inc. (NYSE:FL) shares jumped more than 4% after KR announced that fourth-quarter sales and earnings beat estimates.
Foot Locker earned $146 million, or $1.01 per share, in the fourth quarter, up 20.7% from $121 million, or 81 cents per share, in Q4 2013. Adjusted earnings per share were $1. Sales grew 6.7% year-over-year to $1.91 billion.
The consensus estimate was for earnings of 91 cents per share on $1.87 billion in sales. So, Foot Locker beat earnings estimates by nearly 10% and sales estimates by 2.1%.
For full-year 2014, Foot Locker reported earnings of $520 million, or $3.56 per share, on $7.15 billion in sales, which also topped analysts’ expectations for earnings of $3.48 per share on $7.11 billion.
Looking forward to the current first quarter, analysts are looking for 8.1% annual earnings growth and 3% annual sales growth from FL.
Kroger Co (NYSE:KR)
Kroger Co (NYSE:KR) rallied after the grocery chain trounced expectations for the fourth quarter. KR stock’s net earnings jumped 22.7% year over year to $518 million, or 14 cents per share.
Excluding special items, like the $2.5 billion Harris Teeter acquisition, adjusted net earnings were $1.04 per share. Analysts were predicting adjusted net earnings of 90 cents per share. So, Kroger posted a healthy 15.6% earnings surprise.
Over the same period, total sales climbed 9% to $25.21 billion, also beating the $25.13 billion consensus estimate. Excluding fuel sales, total sales jumped 14.2% over last year.
Looking ahead to full-year 2015, Kroger is targeting net earnings between $3.80 and $3.90 per share, which is well above the Street view of $3.72 earnings-per-share.
Palo Alto Networks Inc (NYSE:PANW)
Palo Alto Networks Inc (NYSE:PANW) posted record-breaking sales recently in its latest earnings report. According to management, Palo Alto Networks is benefitting from strong customer demand for its next-generation enterprise security platform.
Compared to the year ago quarter, total revenues jumped 54% to $217.7 million. Analysts were expecting just $204 million in revenue. So, Palo Alto Networks posted a 6.4% sales surprise. Over the same period, adjusted earnings more than doubled from $7.8 million to $16.9 million, or 19 cents per share.
PANW beat the consensus earnings estimate of 17 cents per share by nearly 12%.
Looking ahead to the fiscal third quarter, Palo Alto Networks expects to bring in between $219 million and $224 million in revenue. Not only does this represent 45% to 48% annual sales growth, it also tops the Street view of $214.7 million in revenue.
PANW anticipates earnings between 19 cents per share and 20 cents per share, also on the higher end of analysts’ expectations of 19 cents per share. All-in-all, Palo Alto Networks had a strong report.
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.
