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Strong Earnings can Fuel a Portfolio

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The market has been under fire for some time now as uncertainty abounds. Even a lot of stocks that had earlier reported strong earnings haven't been able to escape the recent market turmoil. However, there are also many stocks that have held up quite well, outperforming the market and reminding us that strong earnings DO matter.

As an example, we recently conducted a webinar that included unveiling 30 stocks we felt could outperform the market. These included 10 aggressive stocks, 10 "Model portfolio" stocks and 10 income/dividend stocks. 8 trading days later, the stocks have not disappointed, showing the following results through last Thursday's close:

  • Aggressive portfolio - Beating SPX by 4.2%
  • Model portfolio - Beating SPX by 3.62%
  • Income/dividend portfolio - Beating SPX by 1.52%

Of course, 8 days is not a long enough timeframe to come to any major conclusions. However, in going back to November of last year, when we unveiled our "Top 10 Stocks," as well as May 10, just before we unveiled the latest batch of stocks, the Model portfolio was higher by almost 35%, while the S&P was higher by just over 7% during the same period of time.

I'm pointing all of this out to show that strong earnings can make a big difference no matter the market environment. Why? Because traders are attracted to companies that come up big (and why wouldn't they be?).

One thing we've done lately at EarningsBeats is reformat our "EarningsBeats Digest," which focuses on stocks with strong earnings. Friday's edition included a case study on Veeva Systems (VEEV), a stock that has performed well all year - including this past week when it released its numbers, as you can see below. This latest edition also includes a link to a recording of a webinar conducted last week, featuring StockCharts.com's Senior Technical Analyst Tom Bowley, on "What to look for in a Market Bottom." Talk about timely! If you would like to start receiving this FREE EarningsBeats Digest (including Friday's edition with the Market Bottom recording) just click here.

The market could remain highly volatile and, if it does, you will want to focus on stocks that are making money and headed higher for the future. These are the types of stocks traders are attracted to and should outperform the pack.

At your service,

John Hopkins
EarningsBeats

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