Key Earnings For The Week of March 4: Williams-Sonoma, Inc. (WSM), The Cooper Companies, Inc. (COO)

Earnings season is starting to quiet down this week but there are still some interesting stocks to look at. There isn’t a clear sector or theme or even anyof the major bellwethers reporting. But what we do have is a collection of companies that seem to be in a period of making changes to their business in response to market trends. I’ll disuss some of these issues below.

As for the market, February has been a consolidating month where I have noticed a large amount of rotation going on. Staples and health care stocks appear to be fully valued but plenty of technology stocks appear cheap. This is causing some problems for those of us who like to stay balanced but not overpay for stocks. I’m not sure how this dichotomy will be resolved. Either earnings expectations are too high in technology as the economy starts slowing o,r the sector will outperform. I’ve also noted some weakness in retail as the market frets over rising taxes, fuel, the sequester and whatever else is ganging up on the US consumer.

Williams-Sonoma, Inc. (NYSE:WSM)Tuesday

Smith & Wesson Holding Corporation (NASDAQ:SWHC) give results and investors will be expecting a good set of numbers after its peer Sturm, Ruger & Company (NYSE:RGR) saw revenues rise 50% last year. Demand has been pulled forward following speculation over increased hand gun regulation.

My pick of the day has to be VeriFone Systems Inc (NYSE:PAY). It has already given preliminary results and reduced earnings estimates in eye-watering fashion. The stock has rapidly turned from a growth play to a value proposition and is now looking like a special situations candidate. Intuit Inc. (NASDAQ:INTU)’s payment solutions business is doing fine with mid teens growth so it’s not like the end market is particularly bad. However Verifone’s execution appears to be problematic and the European exposure is not helping matters much either. The challenge with these earnings is to re-establish credibility with the investment community because it does have growth opportunities, particularly within emerging markets.

Wednesday

A couple of interesting retail names report today when PetSmart, Inc. (NASDAQ:PETM) and Williams-Sonoma, Inc. (NYSE:WSM) give numbers. The animal health sector is on fire at the moment but it is not the easiest sector to find cheap stocks in. Petsmart looks like the best value but it will always have longer term concerns over Wal-Mart Stores, Inc. (NYSE:WMT) and others encroaching on its markets.

Williams-Sonoma, Inc. (NYSE:WSM) is a tangential play on a recovery in US housing but the stock price hasn’t done too well recently as the market worries about consumer spending in 2013. The key to its growth strategy is its Pottery Barn and West Elm brands. Investors should look out for commentary regarding the West Elm expansion this year as well as its international plans. I think the West Elm Market concept is interesting and would hope to hear confident noises over expansion particularly as this sort of initiative helps to foster differentiation from the online entrants in to the home furnishings market. The stock is not expensively priced but there is a need to demonstrate that margins will not be eroded by its growth activities.

Thursday

Thursday is the most interesting day of the week. I am a big of fan of The Cooper Companies, Inc. (NYSE:COO) and its defensive growth prospects. Eye care is a recession resistant market and Cooper has many growth prospects particularly from international expansion into the Far East and from convincing customers to trade up to silicone hydrogel based lenses. Another key thing to look out for will be its commentary on how it sees consumers migrating to once-a-day from bi-weekly or monthly usage. The former is much more profitable for The Cooper Companies, Inc. (NYSE:COO) and since the US is relatively under-penetrated with once-a-day (as compared to Japan and other countries) there is room to grow even in mature markets.  Anything above say 5-6% topline growth indicates good conditions.

Telco and data center watches will keep a close eye on Finisar Corporation (NASDAQ:FNSR). The stock has been a little weak recently as the market worries about some of its competitive positioning even while its end markets appear to have perked upCisco Systems, Inc. (NASDAQ:CSCO) saw a nice rebound in data center spending in the quarter and this should also be seen in Finisar’s numbers but the key will be its telecom revenues and outlook. If the rest of the sector is a guide Finisar should point to things improving in the second half and I’m sure the stock will move around based on its telecom outlook.

H&R Block, Inc. (NYSE:HRB) will give results and any commentary on the upcoming tax season will be useful to take in. And finally The Kroger Co. (NYSE:KR) will report eaernings. This is an extremely well run company that has managed the new retail reality very well. It appears to be encroaching on Whole Foods Market, Inc. (NASDAQ:WFM)s natural market at the high end, while it is never shy to sacrifice margin in order to keep volumes and footfall up. The strategy appears to be working and hopefully Kroger can start to see gross margins pick up in 2013 as the economy improves and commodity costs moderate. It’s hard to argue that the stock is cheap but that might change if gross margins start improving.

The article Key Earnings For The Week of March 4 originally appeared on Fool.com and is written by Lee Samaha.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!