Which Mega-Bank Stocks Have the Strongest Earnings Trends?

January 19, 2013

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Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

Stocks with improving earnings metrics are worthy of your extra attention. Click here to discover our CHEAT SHEET stock picks now!

Here’s your Cheat Sheet to how the top 5 mega-bank stocks rank via earnings trends:

The Goldman Sachs Group, Inc. (NYSE:GS): Current Price $144.45

Fiscal Year	2008	2009	2010	2011	2012
Revenue ($) in millions	53,580	51,670	45,970	36,790	41,660
Diluted EPS ($)	4.47	22.13	13.18	4.51	14.13

Goldman Sachs has rather volatile numbers on revenue and earnings during these past five years.

Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter	Dec. 31, 2011	Mar. 31, 2012	Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2012
Revenue ($) in millions	8,016	11,800	8,592	10,140	11,130
Diluted EPS ($)	1.94	3.92	1.78	2.85	5.60

The picture from the last three quarters, however, is pretty rosy. EPS numbers have leapt up and revenue has also grown nicely. We’ll keep our lens on this one for now…

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