Which of These Top 5 Pharma 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 top 5 pharma stocks rank via earnings trends:

Actavis Inc (NYSE:ACT): Current Price $84.11

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 2,536 2,793 3,567 4,584 5,915
Diluted EPS ($) 2.09 1.96 1.48 2.06 0.76

We are impressed with rapid growth in turnover every year at Actavis, but are concerned that EPS in 2012 fell sharply.

These stocks are hitting our Profit Targets. Click here now to discover winning stocks!

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 ($) in millions 1,545 1,524 1,355 1,285 1,750
Diluted EPS ($) 0.74 0.43 -0.49 0.60 0.21

We are disappointed that EPS in the December 2012 quarter also took a hit, and we therefore drop Actavis from our watchlist…