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 food stocks rank via earnings trends:
Kellogg (NYSE:K): Current Price $63.43
|Revenue ($) in millions||12,820||12,580||12,400||13,200||14,200|
|Diluted EPS ($)||2.99||3.16||3.40||2.38||2.67|
Though profits at Kellogg fell off after 2010, we still like that they are back on the growth path in 2012.
Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:
|Quarter||Dec. 31, 2011||Mar. 31, 2012||Jun. 30, 2012||Sep. 30, 2012||Dec. 31, 2012|
|Revenue ($) in millions||3,015||3,440||3,474||3,720||3,563|
|Diluted EPS ($)||-0.36||1.00||0.84||0.82||0.01|
Unfortunately, we reject the company for the dismal EPS number in the December 2012 quarter.