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 the top five discount retailer stocks rank via earnings trends:
Target Corp. (NYSE:TGT): Current Price $63.60
|Revenue ($) in millions||63,370||64,950||65,360||67,390||69,860|
|Diluted EPS ($)||3.33||2.86||3.30||4.00||4.28|
Target has grown its topline and EPS nicely between 2009 and 2012.
Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:
|Quarter||Oct. 31, 2011||Jan. 31, 2012||Apr. 30, 2012||Jul. 31, 2012||Oct. 31, 2012|
|Revenue ($) in millions||16,400||21,290||16,870||16,780||16,930|
|Diluted EPS ($)||0.82||1.44||1.04||1.06||0.96|
We don’t like that revenue has been flat across the last three quarters, and EPS is down in the last one. We’ll look elsewhere for better candidates…