We are in the thick of earnings season, with the big technology companies slated to report results this week. When literally hundreds of companies are reporting every day, it can be difficult to find winners.
That’s especially true this quarter because many of the estimates are actually conservative, i.e., they’ve been lowered since the companies last reported. So an earnings beat in this quarter may not actually be as great as it appears to be. Also, a miss could be worse than it’s made out to be (or not-too-bad, if the last quarter may be considered a bottom). This makes stock-picking particularly tricky in this environment.
But I always think that in periods of heightened uncertainty, we need to be extra careful and stick to the basics. So here, I’ve hand-picked a few stocks that look good to me after their earnings results-
Asbury Automotive Group, Inc. ABG
Asbury Automotive Group is one of the largest automotive retailers offering new and used vehicles and related financing and insurance, vehicle maintenance and repair services, replacement parts, and service contracts through franchised dealership locations and stand-alone stores.
Zacks Rank #1
Industry: Automotive - Retail and Whole Sales (top 2%)
The $1.45 billion in quarterly sales topped the Zacks Consensus Estimate of $1.41 billion by 2.8%. Earnings of $2.52 topped the estimated $2.47 by 2.0%.
Valuation: The shares are trading at $9.46X forward earnings, which is relatively close to the median value of 9.25X over the last six months. The S&P 500 is at its six-month high. So upside is expected.
Artisan Partners Asset Management Inc. APAM
Artisan Partners Asset Management is an independent investment management firm that provides a broad range of U.S., non-U.S. and global equity investment strategies through mutual funds and separate accounts. Its clients include pension and profit sharing plans, trusts, endowments, foundations, charitable organizations, government entities, private funds and non-U.S. pooled investment vehicles.
Zacks Rank #1
Industry: Financial - Investment Management (top 11%)
The company reported earnings of 71 cents that beat the Zacks Consensus Estimate of 61 cents by 16.4%. Revenues of $203 million topped the estimated $194 million by 4.6%.
Valuation: The shares are currently trading at 11.67X P/E, which is below the six-month median value of 11.80X. So they are undervalued.
Golden Star Resources, Ltd GSS
Golden Star Resources owns the Wassa gold project in Ghana and controls a number of gold exploration properties in West Africa. The company is well funded and has strong, operations-focused management, experienced in West Africa.
Zacks Rank #2
Industry: Mining – Gold (top 33%)
Earnings of 9 cents beat the Zacks Consensus Estimate of 8 cents and grew from both the previous and year-ago quarters. Sales of $86 million were also grew sequentially and year over year.
Valuation: The shares are currently trading at 17.55X P/E, which is below the six-month median value of 17.83X. So they are undervalued.
eBay Inc. EBAY
eBay operates as an online shopping site that allows visitors to browse through available products listed for sale or auction through each seller’s online storefront. Over the years, the company has evolved from a relatively small community user-based auction site to an online marketplace spanning several countries.
Zacks Rank #1
Industry: Internet – Commerce (top 34%)
Earnings of $1.08 came in higher than the Zacks Consensus Estimate of $1.05. Revenue of $2.87 billion also exceeded the estimated $2.80 billion.
Valuation: eBay’s P/E multiple of 15.27X P/E is relatively close to the six-month median value of 15.11X. So upside is in the cards.
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eBay Inc. (EBAY) : Free Stock Analysis Report
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