Q2 Growth Report - Part I

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 |  Includes: AFAM, AIRM, AMED, APT, ASIA, BUCY, CAC, CACC, CFSG, CMCSA, CMG, CNQR, CNU, COCO, CRM, CRN, CTFO, CUB, CYH, DGX, DLM, EBIX, EBS, EMS, ESLT, FCN, FMR, GTS, HTS, IDCC, INMD, IQNT, JJSF, LH, LINC, MED, MHS, MTR, NHC, NUAN, NVS, ORLY, PEGA, RAX, RGR, RMD, ROST, SEP, SF, SNAK, SQM, SRCL, SVT, TRU-OLD, TSTC, TTEK, TYL, UHS, UHT, VIT, VR, WMS-OLD, WOOF, YORW
by: Trade Radar Operator

Tuesday's Wall Street Journal had an article that asked the question "Can Rally Run without Revenue?" Is the revenue situation really that bad?

Let's take a quick look at some the data compiled through the Alert HQ process.

After each quarter's earnings season, I try to pull together what I am now calling the Growth Report. Part 1 compiles the list of stocks that have shown a year-over-year increase in both revenue and earnings AND a sequential quarter-over-quarter increase in both revenue and earnings. Given the severity of the economic downturn, very few companies have been able to to pull off this trick.

The following table presents a comparison of the last two quarters:

Q1-2009 Q2-2009
In S&P 500 27 41
Total 218 312
Click to enlarge

The number of stocks in the S&P 500 that qualify as growth leaders and have made it onto the Q2 Growth Report has grown by 50%.

Similarly, looking at the entire stock market, the number of growth leaders has almost doubled in Q2 as compared to Q1.

The following chart shows the S&P 500 over the course of the last couple of years. This chart shows that in a year-over-year comparison stock prices, as well as revenues and earnings, were considerably higher than they are currently. This indicates what an accomplishment it is to have made it onto our Growth Report.


Repeat winners

Note that there are 66 stocks that made the list in both quarters. These guys are the real growth leaders so I feel compelled to list them all here:

Symbol Name
AFAM Almost Family Inc
AIRM Air Methods Corporation
AMED Amedisys Inc
APT ALPHA PRO TECH, LTD.
ASIA AsiaInfo Holdings, Inc.
BUCY Bucyrus International, Inc.
CACC Credit Acceptance Corporation
CACI CACI INTERNATIONAL CLA
CFSG China Fire & Security Group, Inc.
CMCSA Comcast Corporation
CMCSK Comcast Corporation
CMG CHIPOTLE MEXICAN GRILL, INC.
CNQR Concur Technologies, Inc.
CNU CONTINUCARE CORPORATION
COCO Corinthian Colleges, Inc.
CRM SALESFORCE.COM, INC.
CRN CORNELL COMPANIES, INC.
CTFO China TransInfo Technology Corp.
CUB CUBIC CORPORATION
CYH COMMUNITY HEALTH S. (NEW)
DGX QUEST DIAGNOSTICS INC.
DLM DEL MONTE FOODS COMPANY
EBIX Ebix Inc
EBS EMERGENT BIOSOLUTIONS, INC.
EMS EMERGENCY MEDICAL SERVICES CORPORATION
ESLT Elbit Systems Ltd.
FCN FTI CONSULTING, INC.
FMR FIRST MERCURY FINANCIAL CORPORATION
GTS TRIPLE-S MANAGEMENT CORP.
GXDX Genoptix, Inc.
HGRD Health Grades, Inc.
HTS HATTERAS FINANCIAL CORP.
IDCC InterDigital, Inc.
INMD IntegraMed America, Inc.
JJSF J & J Snack Foods Corp.
LH LABORATORY CORP. OF AMER.
LINC Lincoln Educational Services Corporation
MED MEDIFAST, INC.
MHS MEDCO HEALTH SOLUTIONS, INC.
MTR MESA ROYALTY TRUST
NHC NATIONAL HEALTHCARE CORP.
ORLY O'Reilly Automotive, Inc.
PEGA Pegasystems Inc.
OTCPK:PSYS Psychiatric Solutions, Inc.
RAX RACKSPACE HOSTING, INC.
RGR STURM, RUGER & COMPANY, INC.
RMD RESMED INC.
ROST Ross Stores, Inc.
SEP SPECTRA ENERGY PARTNERS, LP
SF STIFEL FINANCIAL CORP.
SNAK The Inventure Group, Inc.
SQM SOCIEDAD QUIMICA Y MINERA DE CHILE SA
SRCL Stericycle, Inc.
SVT SERVOTRONICS, INC.
TNDM Neutral Tandem, Inc.
TRCR Transcend Services, Inc.
TRU-OLD TORCH ENERGY ROYALTY TRUST
TSTC Telestone Technologies Corp.
TTEK Tetra Tech, Inc.
TYL TYLER TECHNOLOGIES, INC.
UHT UNIVERSAL HEALTH REALTY INCOME TRUST
VIT VANCEINFO TECHNOLOGIES INC
VR VALIDUS HOLDINGS, LTD.
WMS-OLD WMS INDS, INC.
WOOF VCA Antech, Inc.
YORW The York Water Company
Click to enlarge


Conclusion

So the Wall Street Journal has a point. It's true that cost cutting can't support rising stock prices for long; however, it's clear that slowly but surely revenues and earnings are indeed improving. There has been a significant increase in the number of stocks that are making our rather exclusive club of growth leaders. That can't be bad for the market outlook.

Click this link to download a spreadsheet that lists all the individual stocks that qualified for the Q2 Growth Report.

Continue to Part 2 >>