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Sunday, April 29, 2012

Earnings Growth Charts

There were 6 stocks on the earnings list reporting last week, and I graphed the 6 that had accelerating earnings growth, whicu is one of the most important factors in a stock that is about to make a big move. On the graphs, in the top panel the red line is quarterly EPS growth rate, the black line is quarterly revenue growth rate. In the middle, the red line is quarterly EPS, the black line is price, the green line is quarterly revenue, and the blue is price relative to SPX. None of these reported the end of a fiscal year so I did not include annual EPS. At the bottom the black bars are volume.

First up is ALGT, reporting a decent quarter but after 4 quarters of negative growth. That may have saved it from removal on the next update, but is not yet confirmation of a turn around, Price, however, may be: this broke out to a 5 year high this week, so the market is apparently anticipating that this will resume it's former growth. It is still getting decent growth in revenue, so they may be on to something here.

ASPS is a recent addition, and hasn't been trading very long. I don't have complete revenue data on this, so ignore that line. This has yet to form it's first real base (it might be starting one now), and I don;t think I would go near it until it does.

CTCT reported triple digit growth. but that is also coming off a period of negative  growth. It's earnings record is pretty spotty, and price has been all over the map, but this could settle into a more consistent growth pattern. At this point there is no way of knowing whether it will or not.

ISSI is another one that is inconsistent in it's growth. It is near a 5 year high, but that high is now about 2 years old, so this has seriously underperformed in that time. This does, however, look like one of those bases that get formed just before a big upside move, and qhile this quarter is probably not going to be the catalyst, accelerating growth in the next quarter or two could be the trigger.

LL had a nosedive in growth about a year ago, and price fell pretty badly as well, but since then has had a pretty good recovery. It's just about in the middle of a long term trading range, and if this recovery in growth continues, this might be a good spot to take a position. The only problem is I have no idea whether it will continue to recover. Revenue trending up, so if I had to guess, I would say it will continue.

NEU is one I have been tracking for a long time (it might be one from the original earnings list from almost 4 years ago), and I remember it from when I first started reading IBD about 8 years ago. Yjos is the kind of stock I am looking for: high growth in both earnings and revenue and a solid up trend. This now looks like it is in the late stages of a long term growth cycle, and may go through a pretty major correction before it resumes growth, if it does at all. Some stocks go on what seems to be insanely long and incredibly large bull moves before they eventually top out, and this may be one that does,

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