Four Stocks with Strong After-Hour Earnings to Move on Tuesday
Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
While the market was busy digesting the trouble within the quarterly reports of Baidu and Yum! Brands, there were other companies beating expectations. These under-the-radar stocks posted solid quarters and could very well trade higher throughout Tuesday’s session. As a result, I am looking at those companies.
A Fast-Growing Under-the-Radar Stock Worth Watching
The recreation vehicle manufacturer Thor Industries (NYSE: THO) fell 6% on Monday prior to announcing preliminary sales for Q2 in after-hours. The company said that it expects to report sales of $741 million, which is far better than the $714 million that Wall Street had expected.
The company said that RV sales jumped an incredible 27% and that motorized RVs more than doubled. The stock is currently trading with a forward P/E ratio of 11.50 and might be worth the look with such strong earnings.
A Stock that Might Break out
The consumer cyclical company Hillenbrand (NYSE: HI) posted what appears to be an incredible earnings report. The company beat bottom line expectations by $0.04 with earnings of $0.41. But more importantly, it grew revenue by over 30% to $305.20 million, nearly $25 million more than the consensus.
This is an undervalued company that has traded in a wide yet flat range for the last five years, but is now at the top of its range and could very well break out to trade considerably higher.
Stock to Trade Higher, But Maybe Not Long-Term
Information technology company SolarWinds (NYSE: SWI) announced quarterly results after the market closed that for the most part look very positive. The company had record revenue of $73.5 million, a 32% year-over-year gain and beat EPS expectations by $0.03.
My concern with this company is its valuation. The company’s earnings were strong, but not strong enough to maintain a price/sales of 16.38. Perhaps investors should take into consideration that it trades with a higher market capitalization than the two companies above, has equal growth, but is 16x more expensive compared to sales. With that being said, it will probably rise today due to beating expectations, but I’d be cautious of the longer-term trend.
Large Pharma With Big-Time Growth
While large pharmaceutical companies continue to fight the patent cliff, Gilead Sciences (NASDAQ: GILD) continues to prove that it’s one of the best in the space. The company announced earnings, beating both top and bottom line expectations, and growing revenue by 18% year-over-year. Its new product Comlera grew sales from under $20 million last year to $117.8 million this quarter.
Some have expressed concerns that the stock might be too expensive compared to others in the industry. However, keep in mind, other large pharma companies are seeing flat or declining sales due to the patent cliff. This is a company with a strong pipeline, growing products, and industry-best efficiency. Therefore, I say to definitely buy this stock.
It’s always companies such as Apple, Caterpillar, or on Monday, Yum! and Baidu that capture the attention of the market. These companies affect market direction the following day, yet the four companies I highlighted above show bright spots for the earning season. I suggest you perform additional due diligence, assess the valuation of these companies, and then determine if any fit into your portfolio.
BrianNichols has no position in any stocks mentioned. The Motley Fool recommends Gilead Sciences and Hillenbrand. The Motley Fool owns shares of Hillenbrand. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!