Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).
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Here’s your Cheat Sheet to how the top 4 computer stocks rank via earnings trends:
Dell Inc. (NASDAQ:DELL): Current Price $13.07
|Revenue ($) in millions||61,130||61,100||52,900||61,490||62,070|
|Diluted EPS ($)||1.31||1.25||0.73||1.35||1.88|
Dell is not doing much in the way of growing its revenue, which has remained essentially flat over the five year span we see here. However, EPS has shown a rising trend from 2010 through 2012.
Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:
|Quarter||Oct. 31, 2011||Jan. 31, 2012||Apr. 30, 2012||Jul. 31, 2012||Oct. 31, 2012|
|Revenue ($) in millions||15,360||16,030||14,420||14,480||13,720|
|Diluted EPS ($)||0.49||0.42||0.36||0.42||0.27|
On its quarterly results, Dell is facing falling sales and erratic EPS. In the latest quarter, EPS is the lowest among all the five quarters reviewed here. Dell does not quite make the grade…