FAANG Stocks Lose Their Bite … But These 2 Stocks Are Exploding

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Earnings came in fast and furious this past week, with more than 50 companies reporting. Of those 50+ reports were Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOGL). So, all of the FAANG stocks have officially released their results. (Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN) posted their most-recent results earlier in October.)

FAANG stocks

Unfortunately, of the FAANG stocks, only Facebook and Apple posted earnings beats on both the top and bottom lines. For Facebook, which posted its quarterly results on October 30, earnings per share rose 20.5% year-over-year to $2.12. This was well above analysts’ forecasts for $1.91, so the company posted an 11% earnings surprise.

Revenue of $17.65 billion increased 28.5% year-over-year from $13.73 billion in the third quarter of 2018. The Street view was for revenue of $17.37 billion. So, Facebook posted a 1.6% sales surprise.

However, the stock climbed a mere 1.8% despite the strong quarterly report.

Apple released its results for the fourth quarter of its fiscal-year 2019 on October 30 as well. Earnings per share grew from $2.91 last year to $3.03 – a new fourth-quarter record. Consensus was for earnings of $2.84, so Apple reported a 6.7% surprise. Revenues increased 1.7% from $62.9 billion a year ago to $64 billion, which topped the estimated $62.99 billion.

Not even record Q4 earnings and strong sales could get Apple shares firing on all cylinders, though. They rose just 2.3% on the news.

While it’s always great to see stocks move up on their earnings results, just 2% or so from almighty Apple or Facebook isn’t much to write home about. These are expensive stocks, so beats aren’t going to earn them big moves to the upside (or big profits for their investors).

However, earnings misses have the opposite effect. Amazon and Netflix took big hits after reporting poor results. (I gave my thoughts on Amazon’s earnings last week. You can find my article here.)

They’re also not very exciting in Portfolio Grader. Facebook earns a C for its Fundamental Grade and a B for its Quantitative Grade. Its Total Grade is a B, as you see here:

FB Report Card

What this tells us is that the stock is still seeing good buying pressure, but its fundamentals leave a little to be desired. Its sales are strong, but just about everything else is F- or D-rated. That’s not the type of stock you want to own if you’re looking for hypergrowth.

Meanwhile, Apple earns a C for both its Fundamental Grade and Quantitative Grade. Its Total Grade is a C, too.

AAPL Report Card

The company’s earnings and sales growth aren’t very strong and buying pressure has dried up a bit. Again, there are many better stocks out there that are far more attractively valued. Sure, the FAANGs are household names — but you never want to waste your hard-earned money investing in companies that aren’t offering strong fundamentals, sales and earnings growth.

However, in Accelerated Profits, it’s just the opposite. Our companies are posting strong results … and getting handsomely rewarded.

Two Companies That Soared On Strong Earnings

Let me give you two examples:

DMC Global, Inc. (NASDAQ:BOOM) is likely a stock you haven’t heard much about. This company provides technology services to energy, industrial and infrastructure businesses around the world. Put simply, it produces and sells explosive components for metal fabrication applications and oil-field drilling. It makes things go “boom,” thus the ticker symbol BOOM. Pretty clever, if you ask me!

On October 24, the company posted better-than-expected third-quarter results. Q3 sales jumped 14% year-over-year to $101.1 million, which beat analysts’ estimates for $99.63 million.

Operating income soared 45% year-over-year to $12.8 million, up from $8.8 million in the same quarter a year ago. Adjusted third-quarter earnings came in at $13.4 million, or $0.90 per share, topping forecasts for $0.77 per share by 16.9%.

The stock exploded out of the gate (pun intended!) the next morning and finished the day up a whopping 18.7%. Now that’s the type of reaction we want to see from a strong earnings report.

Here’s how BOOM stacks up in Portfolio Grader:

BOOM Report Card

As you can see, it earns a B for both its Fundamental Grade and Quantitative Grade. Clearly, operating margins are still expanding nicely, which is a good sign that its products remain in demand. BOOM’s earnings growth is also excellent. Its Total Grade is a B, making BOOM a strong buy right now.

Universal Display Corporation (NASDAQ:OLED) is a leading developer of organic light emitting diodes, or OLEDs. Last Wednesday, October 30, the company delivered “another quarter of solid results” and upped its full-year 2019 revenue guidance.

For the third quarter, revenue increased 25.6% year-over-year to $97.5 million, up from $77.6 million in the same quarter a year ago. Analysts were expecting revenue of $85.92 million, so OLED topped forecasts by 13.5%.

OLED also crushed analysts’ earnings estimates by a stunning 34.5%. The company reported third-quarter earnings of $37 million, or $0.78 per share, compared to $22.8 million, or $0.48 per share, in the third quarter of 2018. Analysts were looking for earnings of $0.58 per share.

The response to the report? The stock lit up Wall Street with its 15.3% surge the next day. Plus, that surge came when the stock market was selling off on renewed fears over the U.S.-China trade spat. Clearly, investors were thrilled with the results!

There’s something special I want to note about OLED here. As you can see in my Portfolio Grader, it earns an A for its Fundamental Grade and Quantitative Grade. Only one in 300 stocks do that.

OLED Report Card

Sales growth, operating margin growth and earnings growth are fantastic. So, the stock has all the catalysts lined up to keep it moving higher.

This being the case, it’s really no surprise that OLED would post an earnings surprise and then make such a big post-earnings move.

These are the results you can expect in Accelerated Profits. The companies I recommend here are lesser-known, but still fundamentally superior stocks that are poised to skyrocket in a shorter period of time.

If you missed out on these stunning returns, I have some good news for you. I have another Accelerated Profits stock I’m itching to pull the trigger on that my proprietary Project Mastermind system flagged.

This is another rare AAA-rated stock, with a solid dividend yield to boot! So not only are you getting a company with strong fundamentals to drive it higher, but you’ll make some extra income on it, too! I don’t want you to miss out on any more opportunities, so click here now to hear more and get ready before I make my next stock recommendation. I will be releasing the name to all my current Accelerated Profits subscribers this Friday.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.


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