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’).

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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…

Apple Inc. (NASDAQ:AAPL): Current Price $474.98

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 37,490 42,900 65,220 108,250 156,510
Diluted EPS ($) 6.78 9.08 15.15 27.68 44.15

These are impressive numbers from Apple, with solid growth on the topline and EPS year over year.

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 ($) in millions 46,330 39,190 35,020 35,970 54,510
Diluted EPS ($) 13.87 12.30 9.32 8.66 13.81

Although EPS fell every quarter until September 2012, it definitely bounced back in the latest quarter. Apple certainly makes the list…

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Nokia (NYSE:NOK): Current Price $4.07

Fiscal Year 2007 2008 2009 2010 2011
Revenue ($) in millions 70,000 74,590 57,170 56,360 53,840
Diluted EPS ($) 2.51 1.54 0.34 0.68 -0.41

Nokia is obviously losing market share, as revenues are down every year after 2008. In 2011, even the EPS finally turned negative.

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

Quarter Sep. 30, 2011 Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012
Revenue ($) in millions 12,420 12,950 9,629 9,227 9,486
Diluted EPS ($) -0.03 -0.37 -0.33 -0.47 -0.34

No surprises here that quarterly EPS is a sea of red ink. Even though the last quarter reduced the loss per share, we’ll have to drop this one from our list…

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Dell Inc. (NASDAQ:DELL): Current Price $13.63

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 61,130 61,100 52,900 61,490 62,070
Diluted EPS ($) 1.31 1.25 0.73 1.35 1.88

We see Dell has managed to grow revenue and EPS during 2011 and 2012, despite the onslaught from mobile computing devices.

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 ($) in millions 15,360 16,030 14,420 14,480 13,720
Diluted EPS ($) 0.49 0.42 0.36 0.42 0.27

But the quarterly numbers are quite another matter. The October 2012 quarter shows a slide in both sales and earnings. We’ll move Dell off our radar for now…

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Research In Motion Limited (NASDAQ:BBRY): Current Price $16.49

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 6,009 11,060 14,950 19,910 18,440
Diluted EPS ($) 2.26 3.30 4.31 6.34 2.22

Blackberry was showing steady progress until 2011. But the topline and EPS hit a wall in 2012 as competition from Apple and Samsung took its toll…

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

Quarter Nov. 30, 2011 Feb. 29, 2012 May. 31, 2012 Aug. 31, 2012 Nov. 30, 2012
Revenue ($) in millions 5,166 4,190 2,814 2,873 2,727
Diluted EPS ($) 0.51 -0.24 -0.99 -0.45 0.02

We see that quarterly revenue took it on the chin during the quarters under review: three quarters were in the red. However, EPS managed to grow quarter-over-quarter most recently…

Conclusion

Only AAPL and BBRY grew earnings in their latest quarter. No surprises for guessing that Apple walks away with the honors in thisĀ ”E-Squared” investment analysis of Most Active Stocks because of its better numbers overall.

“E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our successful CHEAT SHEET investing framework. Don’t waste another minute – click here to discover our CHEAT SHEET stock picks now!