5 Stocks to Buy for This Week’s Earnings Bump

The bulls came out in force Thursday amid a deluge of strong earnings reports

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What a difference a day makes. Just 24 hours after markets were gripped by a harrowing selloff, with the Nasdaq Composite suffering its worst one-day pullback since 2011, the bulls are on parade Thursday, with several stocks to buy in the offing.

As I write this amid mid-afternoon trading, the Dow Jones Industrial Average clamored back above 25,000! Some (surprisingly) good earnings results are driving this leg higher.

Sure, there’s been a spate of disappointments with the likes of Caterpillar (NYSE:CAT) letting investors down with weak forward guidance. But a number of other companies exceeded expectations, helping return some excitement to Wall Street after weeks of dread.

Here are five stocks to buy that are blasting higher:

Ford (F)

Ford (NYSE:F) stock is blasting higher on Thursday, up roughly 9% in what is the best one-day gain since 2011 to put an end to months of persistent selling driven by worries over higher interest rates and lower auto demand. This after the company reported better-than-expected earnings of 29 cents per share on a 3% year-over-year increase in auto segment revenue.

Forward guidance was reaffirmed for the full year. Previously, the company reported on July 25 with earnings of 27 cents per share missing estimates by three cents on a 2.8% decline in revenue. Watch for a run to the 200-day moving average, which would be worth a gain of 15% from here.

Tesla (TSLA)

Tesla (NASDAQ:TSLA) stock is up another 8% on Thursday, capping a 20%-plus gain off of its October low to challenge its 200-day moving average after a shockingly good earnings report. Well, at least on the surface: Earnings of $2.90 per share annihilated expectations for a seven cents loss on a 128.6% rise in revenue as Model 3 production ramped up. Free cash flow was very positive as well.

Analysts at Cascend Securities raised their price target to $400 in the wake of the numbers, highlighting the potential for ongoing earnings power thanks to expanded profitability. There are lingering questions about accounting trickery used to achieve the result, looming debt maturities and the likely need for another capital raise. For now, though, the naysayers have been slain.

Twitter (TWTR)

Twitter (NYSE:TWTR) stock is up roughly 15% in mid-day trading on Thursday, taking a run at its 200-day moving average that was lost back in early September.

Before the open, the company reported earnings of 21 cents per share (seven cents ahead of estimates) on a 28.5% rise in revenues to $758 million vs. the $701 million analysts were expecting. Ad revenue totaled $650 million for a 29% increase from the prior period.

Monthly average users were tepid, coming in at 326 million vs. the 330 million expected and the 330 million seen in the same period last year. But this was overshadowed by strong forward guidance and management comments about strong advertiser focus around specific events and interests.

Visa (V)

Visa (NYSE:V) stock is bouncing nicely off of its 200-day moving average as a near 15% drop from its early October highs starts to reverse. This comes after the release of better than expected earnings of $1.21 per share (beating estimates by a penny) on an 11.9% rise in revenues from last year. The company issued strong forward guidance as well as targeted revenue growth in the low double-digits.

Visa will next report results on Jan. 23 after the close. Previously, the company reported on July 25 with earnings of $1.20 beating estimates by a penny on an 11.9% rise in revenues.

Whirlpool (WHR)

Whirlpool (NYSE:WHR) stock is cut back over its 20-day moving average on a pivot off of a multi-week low near $105. The company reported earnings after the close on Wednesday, with earnings of $4.55 beating estimates by 79 cents despite a 1.7% drop in revenues.

Wider margins bolstered the bottom line thanks in large part to President Trump imposing tariffs on imported washing machines earlier this year — resulting in a rather large increase in selling prices.

Forward guidance was strong, with the company looking for earnings of $14.50 to $14.80 per share vs. the $13.99 analysts were looking for. Previously, the company reported results on July 23 with earnings of $3.20 per share missing estimates by 46 cents on a 3.9% drop in revenues.


Article printed from InvestorPlace Media, https://investorplace.com/2018/10/5-stocks-to-buy-for-this-weeks-earnings-bump/.

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