Written by Sean Sechler
April 21, 2022
These Stocks Could Be Smart Post-Earnings Plays
Quarterly earnings reports are very important for a number of reasons. They can help investors gain valuable insight into the state of a company’s business and provide information about whether or not the company is performing well. They also deliver financial numbers that tell the story about a business's profitability and financial stability, and can assist investors with getting an idea about what kind of success the company will have in the coming quarters. Perhaps most importantly, quarterly earnings reports can have a big influence on the price of a stock, which is certainly something to keep in mind as we head deeper into earnings season.
While it's hard to read too much into one quarter for a company, adding shares of a stock you've been watching after it just delivered a strong report can actually be a smart idea. We’ve already seen a few companies deliver strong beats on their latest reports, and there’s always a chance that these stocks will outperform going forward.
If you’re interested in adding new positions to your portfolio, here are 3 stocks with excellent earnings reports to buy now:
Don’t let the headlines surrounding Elon Musk’s plans to purchase social media company Twitter distract you from the fact that his EV company just posted a monumental quarter. Tesla beat both top and bottom line analyst estimates for Q1 and delivered Automotive Revenue of $16.86 billion, up 87% year-over-year. Perhaps what’s most impressive is that the leading electric vehicle company reported record automotive margins of 32.9% and delivered such a strong quarter even with COVID shutdowns in Shanghai impacting the company’s ability to produce vehicles.
Tech stocks have been out of favor among investors in 2022, yet the fact that Tesla has consistently exhibited relative strength this year is an indication of its leadership. There’s also the possibility of a stock split on the horizon that, pending shareholder approval, could ignite a strong rally in the coming months. With sky-high gas prices at the pump, electric vehicles are looking more appealing than ever before, and Tesla’s industry-leading technology and its possibility for lower battery costs going forward make it a fantastic option for investors that are looking to capitalize on the industry’s growth. If we see a decent-sized pullback in Tesla following the Q1 report it could present a great long-term buying opportunity, so keep an eye on how shares respond in coming sessions.
This is the premier U.S. steel stock to own, as Nucor has one of the most diverse product lines of any steelmaker in the Americas. It’s been a consistently impressive stock over the last few quarters thanks to a bounce-back in steel demand after the pandemic, and the company’s latest earnings make it easy to understand why metals & mining stocks have been in favor among investors. Nucor posted a Q1 EPS of $7.67, up 147% year-over-year, and delivered its most profitable Q1 in the company’s history. The company ended Q1 with $4.26 billion in cash and cash equivalents and has one of the strongest balance sheets out of the steelmakers, which is another great quality for investors to keep in mind.
Nucor is also worth a look at this time thanks to the company’s efforts to expand its productions capacity, as a new plate mill in Brandenburg, Kentucky and a $2.7 billion sheet mill project in West Virginia could pay off in a big way over the long run. Finally, the fact that Nucor stock trades at a 7.04 P/E ratio and offers a 1.18% dividend yield makes this a great pick for investors that are looking for more value-based opportunities.
Procter & Gamble (NYSE: PG)
Finally, we have Procter & Gamble, a company that is known for putting up consistent earnings and returning plenty of capital to long-term shareholders. The consumer staples giant reported better than expected Q3 earnings per share of $1.33, an increase of 6% year-over-year. The earnings report included the largest quarterly sales gain in decades, as organic sales grew by 10% year-over-year. After a truly impressive quarter and plenty of brands that should sell well even if the economy heads into a recession, adding shares of Procter & Gamble makes a lot of sense.
With 66 consecutive years of dividend increases, investors can definitely feel comfortable that this is a great stock for generating steady income over the long run. Procter & Gamble shares currently offer investors a 2.23% dividend yield, which is certainly attractive in an inflationary environment. Speaking of inflation, the company has boosted the prices of several of its key products to help offset rising costs. This could impact sales in the coming quarters if consumers decide to tighten their spending, but it seems that the company has been preparing for this so its earnings shouldn't take too big of a hit.Before you consider Tesla, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Tesla wasn't on the list.
While Tesla currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.
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