U.S. markets continued higher today after several stocks reported stellar earnings that beat analysts’ estimates, but the gains were tempered by some mediocre economic reports.
The Commerce Department reported that new home sales for March were at 481,000, down more than 11% and the biggest drop in over 18 months. The Street was expecting 539,000.
Also in the news, weekly jobless claims came in at 295,000, an increase of 1,000 from the previous month, and 5,000 more than analysts’ estimates.
Finally the preliminary U.S. Manufacturing Purchasing Managers’ index dropped from 55.7 in March to 54.2 in April, well below the 55.5 mark expected by economists.
The Dow Jones Industrial Average was up 0.1% and the S&P 500 lifted 0.2%. The Nasdaq Composite was 0.4% higher and set a record high for the first time in 15 years. Energy and basic materials were far and away the strongest sectors on the day.
There were a few big name stocks like 3M Co (NYSE:MMM) and General Motors Company (NYSE:GM) that declined after missing estimates on earnings reports, but several other stocks, such as AT&T Inc. (NYSE:T), Sketchers USA Inc (NYSE:SKX) and Cheesecake Factory Inc (NASDAQ:CAKE) more than made up for them with some solid earnings. Here’s why they are three of today’s best stocks.
AT&T Inc. (T)
AT&T dialed up a profitable first quarter for shareholders today, reporting earnings of 63 cents a share, a penny above analysts’ estimates. Revenue of $32.5 billion was up 0.3% for the year, but was slightly below estimates of $32.8 billion.
Those results sent T stock up 4.2% on over two times its normal volume.
AT&T also said it added 1.2 million wireless subscribers in the first quarter, and that it expects to close on the purchase of DirecTV (NASDAQ:DTV) in the second quarter of 2015.
Sketchers USA Inc (SKX)
SKX stock blasted up 14.5% and hit an all-time high today after reporting adjusted earnings of $1.10 a share, ahead of the Street’s view of $1 a share. Revenue of $767.9 million was also better than Street estimates for $703.2 million.
Several brokerage houses either upgraded their ratings or reiterated buy ratings on SKX stock. BB&T Corporation was the boldest of the group, upgrading Skechers from “hold” to “buy” and raising its stock price target from $62 a share to a whopping $94 a share.
SKX stock has risen more than 70% since the end of October.
Cheesecake Factory Inc (CAKE)
CAKE stock jumped 4.8% after delivering sweet first-quarter earnings to shareholders after Wednesday’s closing bell. CAKE reported EPS of 56 cents, up 23% from a year earlier and ahead of analysts views by 8 cents a share. Revenue of $518 million was $37 million above last year, but $2 million below analysts’ expectations.
Yet the Street brushed that off and gave CAKE stock its blessing anyway. Maybe that’s because this was the first time, after four consecutive quarters of missing the estimates, that Cheesecake Factory had an earnings beat.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.