13 Stocks Reporting Next Week With A History Of Positive Surprises

Tickers in this article: CFNL GMT GS HBNC IBCA INTC LION NTCT RBCAA RNST UNH WTFC XLNX

Looking to trade on earnings season? With the knowledge that past performance does not indicate future returns, we compiled a list of companies reporting earnings next week (Jan 14-18) with a solid history of outperforming earning expectations. Perhaps they will do so again.

To create the list below we found companies who posted earnings per share above the expected number for a minimum of  four consecutive quarters . The idea being, if firms have now reported 4+ consecutive quarters of positive earning surprises, are investors continually undervaluing them?

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What’s an Earning Surprise?

In our list below we refer to company’s earning surprises. The concept of an earnings surprise is pretty straight-forward – the quarterly earnings come out, and earnings analysts are “surprised” by how they don’t match up to their predictions.  “Surprise” doesn’t necessarily have to mean shocking either, it can be the difference of a few cents between what earning analysts predicted and what the company actually reports. To be clear, earnings typically refer to after-tax net income. For this list we only use positive surprises.

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Business Section: Investing Ideas

The companies listed below all have histories of outperforming expectations for 4 consecutive quarters. Do you think they will continue this bullish trend in the quarters to come?


1. Cardinal Financial Corp. (CFNL): Operates as the holding company for Cardinal Bank that provides banking products and services to commercial and retail customers in Virginia and greater Washington, D. Market cap at $488.26M, most recent closing price at $16.67.In Dec 2011: Reported EPS at 0.28 vs. estimate at 0.27 (surprise of 3.7%). In Mar 2012: Reported EPS at 0.26 vs. estimate at 0.24 (surprise of 8.3%). In Jun 2012: Reported EPS at 0.34 vs. estimate at 0.25 (surprise of 36%). In Sep 2012: Reported 0.48 vs. estimate at 0.31 (surprise of 54.8%. [Average earnings surprise at 25.7%]. Earnings date: 01/14/13.

 

2. GATX Corp. (GMT): Operates, and manages assets in the rail, marine, and industrial equipment markets. Market cap at $2.11B, most recent closing price at $44.90.In Dec 2011: Reported EPS at 0.62 vs. estimate at 0.55 (surprise of 12.7%). In Mar 2012: Reported EPS at 0.69 vs. estimate at 0.49 (surprise of 40.8%). In Jun 2012: Reported EPS at 0.8 vs. estimate at 0.61 (surprise of 31.1%). In Sep 2012: Reported 0.75 vs. estimate at 0.66 (surprise of 13.6%. [Average earnings surprise at 24.55%]. Earnings date: 01/14/13.

 

3. The Goldman Sachs Group, Inc. (GS): Provides investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. Market cap at $62.53B, most recent closing price at $133.05.In Dec 2011: Reported EPS at 1.84 vs. estimate at 1.24 (surprise of 48.4%). In Mar 2012: Reported EPS at 3.92 vs. estimate at 3.55 (surprise of 10.4%). In Jun 2012: Reported EPS at 1.78 vs. estimate at 1.17 (surprise of 52.1%). In Sep 2012: Reported 2.85 vs. estimate at 2.12 (surprise of 34.4%. [Average earnings surprise at 36.32%]. Earnings date: 01/16/13.