Which of These Top 5 Most-Active 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’).

Stocks with improving earnings metrics are worthy of your extra attention. Click here to discover our CHEAT SHEET stock picks now!

Here’s your Cheat Sheet to how these 5 most-active stocks rank via earnings trends:

SIRIUS XM Radio Inc. (NASDAQ:SIRI): Current Price $3.12

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 1,664 2,473 2,817 3,015 3,402
Diluted EPS ($) -2.45 -0.15 0.01 0.07 0.51

These are impressive annual numbers from Sirius. They are showing sustained growth in sales and profitability.

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 ($) in millions 783.74 804.72 837.54 867.36 892.42
Diluted EPS ($) 0.01 0.02 0.48 0.01 0.00

After Sirius reported earnings, we find revenue is on a steady uptick; but, EPS growth is flat to negative in the latest quarters. We’ll look elsewhere…