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Sunday, September 5, 2010

Earnings Growth Charts

There were 3 stocks on the earnings list reporting last week, plus one chart that was corrected from last week. In the top panel the black line is revenue growth rate, the red line is EPS growth rate; in the middle panel black is price, red is EPS, and blue is price relative to SPX; at the bottom the black bars are volume.

Last week I posted a chart for DECK that had not been adjusted for a stock split. Here is the corrected chart.

There are many reasons I take acquisitions out of my database, but the primary reason is they skew the data due to their rapid rise in price and volume. ARST had the same effect when they announced they were for sale,  but theirs is an unusual case: so far, there are no takers, and since they are not a confirmed buyout , they stay in the database. They did have decelerating growth in earnings and revenue this quarter, but price is strictly reflecting the fact that they might be acquired.

CVGW reported accelerating earnings on decelerating revenue.While that is not necessarily a red flag, it does bear a little caution. The overall trend in both earnings and revenue is still up, and price has so far reflected that.

JOSB reported a negative growth quarter this quarter, but price is holding up quite well,so the market may be anticipating renewed growth in coming quarters. If it doesn't materialize, then look out below.

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