With just about all companies reporting 3rd qtr. earnings we have seen profits rise just one tenth of a percent on the S&P 500, the worst showing in about 3 years. This was still better than the lower expectations of a 2% decline boosted by retail and consumer related stocks.
Almost 65% of companies did beat lowered earnings forecasts but revenue was down almost 1% leaving companies with less income and forced to cut operating cost even further. Fourth qtr. earnings are expected to be better with a 4% growth but far from earlier forecasts. Source: Investors Business Daily
As many of you know, we track and post daily all stocks that have reported 25% or better earnings growth and in spite of the dismal earnings growth described above, today we will highlight a few of these higher growth stocks. Research has shown that stocks with strong earnings growth that are breaking out to new 52 week highs often go on to be market leading stocks during a confirmed market uptrend.
Yahoo! Inc. – (YHOO) – After a slow 2011, Yahoo has managed Three straight qtrs. of higher growth. On October 22 they reported a 52% EPS growth, 0.35 vs 0.23. this came after a 41% and 50% growth rate for qtr. One & Two of 2012. On the 23rd of October the stock broke out to a new 52 week high on big volume and continues to make new highs. Chart EPS due 1/21/13
Old Dominion Freight Line Inc. – (ODFL) – On October 25th they reported a 30% EPS growth, 0.59 vs 0.45. The stock broke out above the $32 level and ran to $35. It has since tested that $32 level again and could be forming a new base here. Chart We highlighted this stock on September 2nd. in this article on stock splits. Article EPS due Jan. 28, 2013
PDF Solutions Inc. – (PDFS) – This small cap and thin traded stock broke out to new high ground back in August after a strong 2nd qtr. report. On October 24th they reported a 200% EPS growth 0.21 vs 0.07. The stock has hit resistance at $15 and seems to have found support around $13. Chart Next EPS due date – Feb. 15, 2013
FleetCor Technologies Inc. – (FLT) – 2012 earnings growth has been solid for this business services company, the first and second qtr. saw 28% growth and on November 8th they reported a 48% EPS growth, 0.83 vs 0.56. The stock is at 52 week highs and 25% extended from its break out over $40. Chart EPS due Feb. 4, 2013
Sturm Ruger & Co. – (RGR) – Seven straight qtrs. of double digit earnings growth has this stock making new 52 week highs. The latest earnings showed a 60% EPS growth 0.88 vs 0.54. On Nov. 19th, Ruger announced that its Board of Directors voted to declare a special dividend of $4.50 per share on the Company’s issued and outstanding shares of common stock. This cash dividend will be paid on December 21, 2012 to shareholders of record as of December 7, 2012. Chart
That is all for now, but we can see here that even though the markets are under pressure, and we just saw the weakest earnings growth since 2009, solid earnings growth is still a hard thing for investors to ignore.
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