Which of These 4 Top Healthcare Stocks have the Strongest Earnings Trends?

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 these top 4 healthcare stocks rank via earnings trends:

St. Jude Medical Inc. (NYSE:STJ): Current Price $40.88

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 4,363 4,681 5,165 5,612 5,503
Diluted EPS ($) 1.01 2.26 2.75 2.52 2.39

St Jude’s annual revenue grew nicely until 2011, and EPS until 2010. Business seems to be slow thereafter…

Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012 Dec. 31, 2012
Revenue ($) in millions 1,407 1,395 1,410 1,326 1,372
Diluted EPS ($) 0.40 0.67 0.78 0.56 0.39

A mixed quarterly performance from St Jude’s. We note that revenue is flat, and EPS has fallen off in the last two quarters. This company does not make the grade…

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