Tags: stocks | earnings | profits | surprises

Barron's: 9 Undervalued Stocks With Solid Earnings, Revenues

Barron's: 9 Undervalued Stocks With Solid Earnings, Revenues
(Dreamstime)

By    |   Thursday, 27 April 2017 01:05 PM

Stocks have rallied since Donald Trump won the presidency on a pro-business platform, and solid company profits can help drive the market higher. Barron’s magazine identified nine stocks that reported solid earnings and have a record of gains afterward.

 “The percentage of S&P 500 companies beating earnings estimates in the first quarter is the highest in six years,” the magazine said. “And the percentage of those beating forecasts for earnings and revenues is the highest in five years,” according to data from Bank of America Merrill Lynch.

The S&P 500 stock index rose about 14 percent to a record high by early March, and has traded in a range since then. Stocks sold off after President Trump’s push to change the country’s healthcare laws stalled out, but rebounded as his tax cut proposals started to take shape.

The S&P 500 "trades at 17.7 times forward earnings, versus an average since the start of 2000 of 15.7 times,” Barron’s said. “For stockpickers, upside surprises can help identify promising buys.”

The magazine compiled a list of companies that beat earnings forecasts by more than 5 percent and revenue estimates by 2 percent. Their shares also rose at least 4 percent after reporting quarterly earnings.

The nine companies listed below beat earnings estimates by at least 5% in recent weeks and revenue estimates by 2%, and their shares jumped at least 4% in response.

1. C.R. Bard (BCR)

EPS surprise: 8.4%

Revenue surprise: 2.4%

Price impact: 19.5%

Forward P/E: 25.5

2. Caterpillar (CAT)

EPS surprise: 104%

Revenue surprise: 6%

Price impact: 7.9%

Forward P/E: 25.8

3. Constellation Brands (STZ)

EPS surprise: 8.4%

Revenue surprise: 2.4%

Price impact: 6.4%

Forward P/E: 21.4

4. CSX (CSX)

EPS surprise: 17.1%

Revenue surprise: 4%

Price impact: 5.6%

Forward P/E: 21.5

5. Edwards Lifesciences (EW)

EPS surprise: 13.2%

Revenue surprise: 5.5%

Price impact: 10.4%

Forward P/E: 30.8

6. Hasbro (HAS)

EPS surprise: 42.6%

Revenue surprise: 3.8%

Price impact: 5.9%

Forward P/E: 20.7

7. KeyCorp (KEY)

EPS surprise: 14%

Revenue surprise: 3.3%

Price impact: 4.8%

Forward P/E: 12.9

8. McDonald’s (MCD)

EPS surprise: 9.8%

Revenue surprise: 2.7%

Price impact: 5.6%

Forward P/E: 22

9. Wynn Resorts (WYNN)

EPS surprise: 29.5%

Revenue surprise: 5.3%

Price impact: 5.7%

Forward P/E: 26.1

Source: Barron’s

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Stocks have rallied since Donald Trump won the presidency on a pro-business platform, and solid company profits can help drive the market higher. Barron's magazine identified nine stocks that reported solid earnings and have a record of gains afterward.
stocks, earnings, profits, surprises
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2017-05-27
Thursday, 27 April 2017 01:05 PM
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