Consistency is tough to achieve.
The following table of stocks comes from a list of those companies that reported during the month or so that comprised earnings seasons in Q1, Q2 and Q3 of this year. The screen uses the following criteria:
- The company beat earnings estimates each quarter
- There was an increase in year-over-year earnings each quarter
- There was an increase in year-over-year revenues each quarter
- The company offered upside guidance in Q1 and Q2
|BWA||Borg Warner||Capital Goods|
|EMN||Eastman Chem||Basic Industries|
|PII||Polaris Inds||Capital Goods|
|RCL||Royal Caribbean||Consumer Services|
|SHOO||Steven Madden||Consumer Non-Durables|
|STJ||St. Jude Medical||Health Care|
|STRA||Strayer Education||Consumer Services|
|WBC||WABCO Holdings||Capital Goods|
Not only did these companies deliver continuously improving results, they delivered the results promised in their upside guidance. To put things into perspective, this screen identified 30 companies out of almost 1400 stocks that have reported so far during this Q3 earnings season.
Loosening the criteria a bit by removing the requirement for upside guidance and the list increases in size from only 30 companies to 250 companies. This now pulls in companies like Apple (AAPL), Microsoft (MSFT) and Coca-Cola (KO) among many others. Many of these companies simply offered no guidance at all. This was especially the case in Q1 where perhaps many companies became cautious as fears of a double-dip recession became more of a concern for the markets.
One thing that is noticeable is that the tech sector is especially well-represented on both lists. Though a few tech large-caps are present, like Intel (INTC), many of these companies are small-caps or mid-caps. Tech often leads the way during the first stages of recovery. This, to me, implies that the recovery, though sluggish in terms of employment, is solid in terms of company profits across the market cap spectrum. I think that is reassuring for those who are looking for the economy to continue to strengthen.
Disclosure: no positions