During the recent market downturn, a lot of investors are in panic mode with the recent recession still fresh on the mind. Keeping your composure during politically and economically volatile times has its pay off. This is the time to build a watch list of the best companies, both in terms of relative strength to the overall market and companies where earnings are trending higher. Here is a list of three companies that have weathered the economic conditions extremely well and have corrected much less than the overall market in the past month.
Lululemon Athletica (LULU), the premium maker of athletic apparel geared towards yoga enthusiasts, has been a very strong performer over the past six months with the stock up approximately 44%. Lulu is $9 off 52-week highs and could be an excellent long through the 50-day moving average. Here are some reasons the company will continue to do well:
- The company reported earnings on Friday and once again beat on both revenues and earnings. The company reported revenue of $212.3 million, a 39% increase over the second quarter of fiscal 2010, and earnings of $38.4 million or $0.26 per diluted share, a 73% EPS increase over the prior year.
- The company has plans to continue expansion with 11 new stores in the U.S. and 3 in Australia during the third quarter.
- Consumers of premium apparel are less sensitive to price changes. The continued uptrend in fashionable yoga apparel and the expanding store base will continue to drive growth.
Hansen Natural (HANS), the producer of natural sodas and Monster energy drinks has been a star-- to say the least-- up approximately 53% over the past six months. The stock made recent 52-week highs at the end of August, when the market was stabilizing after the recent sell off. So far, it is holding the breakout level during the volatile market moves. Here are the reasons why.
- The company reported strong second quarter earnings with revenue of $527.5 million, a 27% increase over the second quarter of 2010, and earnings of $84.2 million or $0.90 per share, a 32% increase over the prior year.
- Monster Energy drinks are experiencing excellent growth both domestically and in international markets with plans for further international expansion.
Ulta Salon, Cosmetics and Fragrances Inc. (ULTA) is another star stock that reported earnings this past week, up about 63% over the past six months. The stock corrected with the market but started moving back to highs after reporting strong earnings Friday, up 14.5% when the S&P 500 was down over 2.5%. Friday was the day to get in and after a move like that on strong volume there will most likely be continuation in the weeks to come providing more opportunities to get in. Here are the highlights.
- Ulta reported second quarter revenue of $394.6 million, up 22.6% over the second quarter of 2010, and earnings of $0.38 per diluted share, up 73% over the prior year.
- Continued store expansion with plans to open 61 new stores in 2011. Continued comparable store sales growth at 11.2% for the six months versus 10.8% in 2010.