Earnings Growth Charts

AIRM reportd a big increase in EPS and a big drop in revenue. Normally that situation is a red flag, but the market doesn’t seem to be bothered by it. This looks like is due for a pullback, or even better, a base. This looks like it is in the early stages of a long term up trend, and waiting for breakouts from bases may be the best strategy here.

ALGT reported triple digit growth this quarter, and has been in a growth trend for the last 3 quarters now. Price responded by breaking out to a 5 year high earlier this year. This was a leader in 2009-2010, but was left for dead in 2011, and has now come on like gangbusters. Another illustration of the lesson that it pays to keep an eye on former leaders.

CACC reported accelerating growth, and has had very steady earnings and revenue growth since hitting bottom in 2009. It is now bouncing off it’s second major pullback of the up trend, and probably has further to go. This thing gets very little volume now, but I can’t imaging Wall Street ignoring this for much longer.

DIN is a pretty funny looking chart: it has had slowly dropping revenue for about 4 years, but slowly rising EPS. It is in the handle of a very long cup and handle pattern, and if it breaks out, which it may be starting to do now, it could lead to an awfully big move. Fundamentally I’m not that thrilled with this stock, but technically it has a lot of potential.

HWKN is one that caught my eye in late 2009 when it started a big move up. but that was in the midst of a drop in revenue. That finally caught up with it in 2010, when it started a long pullback that turned into a base. It may now start building the right side of that base, and has the potential to make a big move off that base.

LGCY is a recent addition to the list. Revenue made a big growth spurt about a year ago, and EPS caught up it this quarter. This looks like and  early stage base, and also looks like it is build the right side. Another quarter or two of high growth will likely send this flying again.

MELI is a former leader that has had a couple of big pullbacks since the middle of 2011. It made a big move off the first one, and looks like it is getting ready to make another one right about now.

With so many stocks reporting this week, it was highly unlikely I would not make any mistakes, and here is the first one I caught. I reported that SYNA had triple digit growth, but discovered I had entered annual EPS rather than quarterly EPS into the spreadsheet, so this in actuality has negative growth this quarter, and now the price graph makes more sense. However, this still is up trending in annual earnings, and is near the bottom of a long trading range, so this may be a pretty good buy point if you are more inclined for “value” trading.

I have been experimenting with using histograms instead of lines to show growth rates, and I think it will look better, but on the existing templates it gets very cluttered. What I may do is start a new one from scratch, so I will probably be using the existing templates  at least until the end of this year. These charts are not pretty, but they do get the job done.

2012-08-05 11:46:54

Source: http://samuraitrader.blogspot.com/2012/08/earnings-growth-charts.html