Which Tech Goliath has 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 the top 5 mega-tech stocks rank via earnings trends:

Cisco Systems, Inc. (NASDAQ:CSCO): Current Price $20.99

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 39,540 36,120 40,040 43,220 46,060
Diluted EPS ($) 1.31 1.05 1.33 1.17 1.49

We see a steady trend of improvement in sales and EPS at Cisco over the past four years.

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

Quarter Jan. 31, 2012 Apr. 30, 2012 Jul. 31, 2012 Oct. 31, 2012 Jan. 31, 2013
Revenue ($) in millions 11,530 11,590 11,690 11,880 12,100
Diluted EPS ($) 0.40 0.40 0.36 0.39 0.59

We are also impressed with revenue growth during the last four quarters and the improvement in EPS over the last two. Cisco remains as a contender this analysis…