Some clear winners have emerged from the latest earnings season. While a lot of companies struck out with their second-quarter financial results, others hit home runs, and their stocks are now sitting at or near 52-week highs. Many blue-chip names saw their sales and profits grow rapidly during Q2 of this year, surprising analysts and leading to upward revisions on their future earnings and share price targets.
For investors trying to make sense of the corporate earnings reports, it’s important to zero in on the companies that beat expectations, raise guidance and whose stocks are trending higher as a result. After all, these are the types of growth stocks that can boost a portfolio and lead to long-term gains. Many of these stocks also have an enviable track record of rewarding shareholders. Here are three growth stocks you’ll regret not buying soon.
Berkshire Hathaway (BRK.A/BRK.B)
At age 92, Warren Buffett is still going strong. The Oracle of Omaha’s holding company Berkshire Hathaway’s (NYSE:BRK.A / NYSE:BRK.B) stock just closed at an all-time high after reporting exceptionally strong second-quarter financial results. Berkshire’s Class A stock rose 3.4% to close at an all-time high of $551,920, beating the share’s previous high set in March 2022. The more affordable Class B stock increased 3.6% to hit a new record close of $362.58 a share. This, as the benchmark S&P 500 index continued to decline in August.
The record highs for the stock come after Berkshire Hathaway reported that its operating earnings rose 6.6% year-over-year to $10.04 billion in Q2. Berkshire also reported that its cash holdings reached $147 billion in the quarter ended June 30, near record levels and much higher than the $130 billion reported in Q1 of this year. Earnings from the company’s insurance underwriting business recorded a 74% increase during Q2 to reach $1.25 billion. That offset the weakness in the BNSF railroad that Berkshire owns.
Year to date, BRK.B stock is up 16%, matching the gain of the S&P 500 index that Buffett compares his company’s share price against.
Thomson Reuters (TRI)
Not all media companies are struggling right now. Case in point: Thomson Reuters (NYSE:TRI). The global newswire service reported a Q2 profit of $894 million and maintained its forward guidance as revenue at the media company strengthened in the April through June period. The company, which operates the Reuters News Agency, said its Q2 profit amounted to $1.90 per share. That marked a turnaround for a company that recorded a loss of $115 million, or 24 cents a share, in Q2 2022.
The latest profit beat analysts’ expectations of 78 cents per share by a wide margin, according to Refinitiv data. Revenue in Q2 of this year amounted to $1.65 billion, up 3% from $1.61 billion a year earlier. Thomson Reuters said its latest results got a boost from the sale of 15.5 million shares of the London Stock Exchange Group, which it partially owns, for $1.60 billion. Looking ahead, the company maintained its guidance for all of this year, saying it still expects total revenue growth of 3% to 3.50%.
TRI stock has increased 13% over the last 12 months and is up 212% over the past five years, making it a growth stock with huge potential.
McDonald’s (MCD)
The Golden Arches is always a good bet. And McDonald’s (NYSE:MCD) just delivered better-than-expected earnings, as it almost always does. The Chicago-based quick-service restaurant chain said its latest Q2 financial results got a nice boost from a rebound in sales at its stores in China. McDonald’s reported earnings per share (EPS) of $3.17 versus $2.79, which was expected on Wall Street. Revenue in the period came in at $6.50 billion compared to $6.27 billion that had been forecast by analysts who track the stock.
The company’s global same-store sales rose 11.7%, topping expectations of 9.2%. All three of McDonald’s divisions reported double-digit same-store sales growth. In the U.S., the company’s biggest market, same-store sales increased 10.3% during Q2. Same-store sales growth in international markets was driven higher by a 14% rise in China, where the country is emerging from Covid-19 lockdowns. The resurrection of the popular character Grimace and a new “Grimace Birthday Meal” is helping to lift sales at McDonald’s outlets in the U.S. and Canada.
MCD stock has increased 11% in the last 12 months and gained 82% over the past five years. That is a growth stock you’ll regret not buying.
On the date of publication, Joel Baglole did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
