In the midst of earnings season it is easy to bypass those companies with strong fundamental performance. Often we see those that trade considerably higher and assume that it was due to incredible fundamental performance. Sometimes this is incorrect, and in this piece I am looking at three under-the-radar companies that look attractive following earnings.
This Stock May be Expensive, but it’s Worth it!
Core Laboratories N.V. (NYSE:CLB) traded higher by 11% during the final two days of last week, behind very strong earnings. The company beat on both the top and bottom line with low double digit growth and issued guidance above the consensus. The stock now trades at 6.30 times sales and a forward P/E ratio of 23.45. Therefore, CLB is far more expensive then I typically purchase, but for this company, I am willing to make an exception.
Despite what appears to be an over-priced stock, Core Laboratories N.V. (NYSE:CLB) has all patented technology and operates in a massive market as the Google of oil/gas production. It is an energy technology company, creating the technology needed to squeeze more crude and gas from existing reservoirs; also helping energy companies determine where to drill.
During its last quarter, all three of its divisions hit new records, and the company continues to benefit from stronger partnerships and a diversified 80% of its business being international. After such a strong quarter, I see no reason not to buy this stock, especially with the price of crude being so low.
A High Growth Mega Company to Buy Now
Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) staged a two-day 10% rally to end last week after strong earnings. The $100 billion company beat on both the top and bottom line as net profit grew 18% and revenue grew 26% year-over-year (yoy). Furthermore, the company’s margins expanded and it raised guidance on top of strong demand for smartphones and tablets.
Here’s a company that really had nothing bad to say during its quarter, as the world’s largest chip foundry continues to grow rapidly. The company is constantly beginning new production of different sized chips and now forecasts industry growth of 10%, far better than its previous guidance of 7%.
In regards to its investment outlook, the company pays a 2.65% yield and trades at just 13.72 times next year’s earnings. Sure, the company does have a hefty price/sales ratio due to high margins, but is seeing solid growth and has a very healthy balance sheet. Therefore, I’d buy at these undervalued levels!