For Immediate Release
Chicago, IL – July 2, 2013 – Today, Zacks Investment Ideas feature highlights Features: Wyndham Worldwide (WYN-Free Report), Jarden Corporation (JAH-Free Report) and Herbalife Limited (HLF-Free Report).
3 Stocks to Buy Before Earnings Season
In the world of investing, past performance is certainly no guarantee of future performance. A stock that has been going up for years, may suddenly stop rising and start declining. Ditto for a stock that has been sinking. In the blink of an eye it starts rising.
The same is true during earnings season. Just because a company beat the estimate the prior quarter doesn't mean it will beat again this quarter.
But what if that company has put together a hot streak of earnings beats?
What if a company has beaten not just two or three quarters in a row but 20 quarters in a row- or 5 years- without a miss?
Apple had put together just such an impressive earnings surprise streak until it finally missed in late 2011. In the 6 quarters since the miss, it has missed another 3 times. Share price, however, peaked in between the second and third miss.
But during its earnings surprise streak, investors were handsomely rewarded.
Perfection Isn't Easy
Even with all of the unknowns in investing, I'd rather buy a company that is on an earnings hot streak, than one that is dead cold.
Companies with a perfect earnings track record for the last 5 years are a small select group. It's incredibly difficult to keep beating for 5 years through all the ups and downs in the economy. Management has to manage expectations very, very well. There's little room for error. That takes skill (and maybe some luck.)
These three companies haven't missed in 5 years. I featured two of these companies last quarter and they came through with another earnings beat.
Of course, an earnings beat doesn't necessarily mean a stock will rise afterwards. Being light on guidance or an earnings/sales warning, for instance, could put the damper on an earnings beat. But I still like my chances with an earnings beat versus an earnings miss.
Will their streaks continue this earnings season?
3 Companies With Perfect Earnings Surprise Track Records
1. Wyndham Worldwide
1. Wyndham Worldwide (WYN-Free Report)
Wyndham is one of the largest hospitality companies in the world. It operates about 630,000 hotel rooms worldwide and operates vacation rentals and exchanges with over 106,000 vacation properties in 100 countries. It also operates a network of 190 timeshare properties with about 915,000 owners.
Forward P/E = 15.4
Expected 2013 earnings growth = 15%
Zacks Rank #3 (Hold)
Reporting second quarter results on July 24
2. Jarden Corporation (JAH-Free Report)
Jarden owns over 100 of the most famous consumer brands in the world including Rawlings, Crock-Pot, Mr. Coffee, Sunbeam, Seal-a-Meal, and First Alert.
Forward P/E = 13.4
Expected 2013 earnings growth = 17.7%
Zacks Rank #3 (Hold)
Expected to report second quarter results on July 23
3. Herbalife Limited (HLF-Free Report)
Herbalife makes a whole host of nutrition products including protein shakes and snacks, energy and fitness drinks, vitamins and nutritional supplements. It sells its products through independent distributors in 85 countries.
The company has been in the news recently due to a change in auditors resulting from the resignation of a partner with its former auditor. It did not have to restate any financial statements.
Forward P/E = 9.4
Expected 2013 earnings growth = 18.7%
Zacks Rank #2 (Buy)
Expected to report second quarter results on Aug 5
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Get the full Report on WYN - FREE
Get the full Report on JAH - FREE
Get the full Report on HLF – FREE
Follow us on Twitter: https://twitter.com/ZacksResearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
More From Zacks.com