Early-February Earnings Reports
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A few potentially very good companies have yet to report their December-quarter results. Hopefully prospective investors can find some diamonds in the rough. The following stocks range from semiconductors to car rental companies, and combined might well be solid additions to any portfolio.
IAC/Interactive Corp. (NASDAQ: IACI), reporting Feb. 6
This company enjoyed an exceptional 2012, with share earnings likely climbing around 25% for the year. If analyst estimates are on target, share profits soared to about $0.78, up from $0.54 in the prior year. IACI’s core Website businesses are realizing outstanding revenue gains. Ask.com stands out, having grown its query revenues more than 50% through the nine-month period ended Sept. 30. Incredibly, this increase has been driven more by quality improvements than expanded distribution. In all, given the positive momentum, the outlook appears favorable through 2013 as well.
IACI has undergone a makeover over the past decade, having formerly been the owner of the likes of the USA Network and Ticketmaster. It continues to transform itself, as seen by the September 2012 acquisition of The About Group for $300 million. The new operating model seems to be supporting growth in revenues and income.
The shares sold off during the past year, but may well be ready to recover strongly in light of the outstanding performance. I think this stock will fare well in the near term.
Microchip Technology (NASDAQ: MCHP), reporting Feb. 7
I posted a blog back in December advising investors to consider makers of Microcontrollers, and Microchip Tech is the largest of these. The premise was that these firms are more stable than the broader semiconductor market and are poised to bounce back amid improving market conditions. Microcontrollers (MCUs) are utilized in a vast and growing number of applications. The stocks, also including Atmel, may well be poised for a recovery. Atmel, notably, reports results on Feb. 6 and share net is expected to have been flat year over year at $0.07.
Microchip Tech expanded its proportion of Analog and Interface revenues through the recent acquisition of Standard Microsystems Corp. Its bottom line is apt to turn upward over the next year or so, given the probable corresponding boost to revenues. As such, I continue to suggest the purchase of Microchip Tech shares at this juncture.
Avis Budget Group, Inc. (NASDAQ: CAR)
Avis Budget is another company building its asset base by way of buyouts, specifically its purchase of Zipcar. Avis' shares have remained on a streak, substantially outperforming the S&P 500 since October. Again to reflect back upon a December blog, I had touted several rental companies, none of which were auto related, citing a trend toward leasing certain large items rather than purchasing. This situation may be a bit different, as earnings should rise behind economic growth and an improved supply/demand balance, fueled by industry consolidation. Avis shares could well have some gas left in the tank, particularly if the Zipcar integration is efficient and accretive.
Possibly you will see the value in these three companies. All of them have changed their business lines to varied extents. IACI, MCHP, and CAR shares would be solid components of an equity investor’s portfolio. Remember to see the long-term appreciation potential of each holding, too.
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