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Sunday, June 27, 2010

Earnings Growth Charts

I had two stocks from the earnings list reporting last week, so I have the time to do both quarterly and annual growth charts. As usual, from top to bottom the lines are: black, revenue  growth rate; red, EPS growth rate; black, price; red, EPS; blue, price relative to SPX; and black bars volume. On the annual charts, red lines are EPS, light blue revenue.

CYAN is a stock that happened to be rebounding from a sharp drop in earnings when I was updating the sheet a while back, and I put it on. Since then it has reverted to slow or no growth, and price has come flying right back down. This is not the type of stock I am looking for and will most likely get cut on this quarter's update.

Here is the annual EPS and revenue, which look only slightly better.

SNX, by contrast, is the type of stock we are looking for.As you can see, both earnings and revenue growth have rebounded after sharp drops, and price recently hit an all time high. This is in a long base pattern, as the market is waiting to see if growth continues or flattens out, as so far it appears to be doing.

On the annual growth chart, you see that while price collapsed during the market crash, earnings and revenue did not. In the last fiscal year revenue did drop slightly, but we are halfway through the current fiscal year and so far revenue is on track for growth again.

After I get the earnings sheet updated, I am planning on making improvements to this chart. While annual growth is good to look at, it is quarterly growth that drives big moves in price, and when we are in the heart of earnings season, there are too many stocks reporting to do two charts for each. I need to find a readable way to incorporate both charts into one. It may end up that I will need to find another software platforn to work with.

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