All cylinders continue to fire
Ford Motor Company (NYSE:F) grew year-over-year revenue by 15% and its North American pretax profit hit an all-time record at $2.33 billion. The company easily exceeded earnings expectations, beating the revenue consensus by nearly $3 billion! In addition, the problems in Europe look to be stabilizing, as Ford hopes to be profitable in Europe by 2015. While this may sound ridiculous to some, the losses in Europe dropped from $404 million to $348 million. Thus, showing significant progress.
Yet, despite the strengths mentioned above, Ford Motor Company (NYSE:F) is currently trading at the same price that it was prior to earnings. Sure, the stock rose 3% after earnings, but then fell equally in the day that followed. So, why did Ford Motor Company (NYSE:F) fall in the day after earnings? As you might know, RBC slashed its rating to “sector perform” from “outperform,” essentially citing valuation as the reason.
Sometimes, it’s good to step back and soak in the reaction of a stock to certain events. In this case, the opinion of one analyst superseded an all-time best in pretax profit, double digit revenue growth, and emerging strength in Europe. Furthermore, Ford is dirt cheap, regardless of its one-year 90% return.
For example, the S&P 500 has gained 33% since January 2011. In the meantime, Ford Motor Company (NYSE:F) has lost nearly 7% of its value. Therefore, I find it laughable, even somewhat irresponsible, to suggest that Ford, at 10 times earnings and 0.47 times sales, is expensive. Hence, I anticipate a major post-earnings bounce from a company that is leading the U.S. in fundamental growth.
I’ve always said that earnings season is the best time to capitalize on value. You can buy ahead of earnings in hope of a big pop, or you can wait, be patient, and capitalize on post-earnings value. In the case of these five stocks, I think value is obvious, and that gains will follow each company’s quarterly report.
The article 3 Top Post-Earnings Stocks Worth Exploring originally appeared on Fool.com and is written by Brian Nichols.
Brian Nichols owns shares of Apple Inc. (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB), and Ford Motor Company (NYSE:F). The Motley Fool recommends Apple, Facebook, and Ford. The Motley Fool owns shares of Apple Inc. (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB), and Ford Motor Company (NYSE:F). Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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