4 Stocks With Robust Profit Forecasts
The U.S. economy is picking up steam, yet the Federal Reserve is reluctant to put the brakes on its ultra-liquid monetary policy. How do these factors influence an investor’s stock-picking strategy?
Actually, not that much. Although second-quarter GDP growth (at 3.7%) is encouraging, and Wall Street economists see GDP strengthening in Q3 and Q4 this year, investors should focus on companies that are widely expected to post solid double-digit earnings increases not only in the current full year but in the next fiscal year.
Today’s Your Weekly Review offers a decent supply of choices to that end. Let’s boil the list down further by focusing only on those stocks that are trading, say, only 5% below their 52-week peaks or less. That’s far better than the maximum 15% level below the 52-week high as demanded by the screen.
Nike (NYSE:NKE) is building a base that is approaching six weeks in length. It’s just 1% off its all-time high of 117.72. The shoe and athletic apparel and equipment maker is part of the No. 1 Apparel sector, as ranked in IBD’s stock research tables. Analysts polled by Thomson Reuters see earnings up 14% in fiscal 2016 ending in May and up 13% in fiscal 2017. Revenue grew 10% to $ 30.6 billion in fiscal 2015.
Fortune Brands Home & Security (NYSE:FBHS), part of IBD’s top-10-ranking Building-Construction Products/Miscellaneous industry group, may see its EPS growth accelerate in the third quarter, as Wall Street sees profit jumping 83% to 64 cents a share. EPS rose 38%, 4% and 16% in the prior three periods. Earnings are also seen growing 30% this year and 22% the next.
Cabinet and plumbing products maker Masco (NYSE:MAS) and Atlanta-based carpet and tile supplier Interface (NASDAQ:TILE) are expected to increase full-year earnings by 16% and 89%, respectively. Like Fortune Brands, they show up high in the Your Weekly Review table because they’re part of the Building sector, ranked No. 2 among 33 industry sectors by IBD.