Which of These 5 Pharma Stocks have the Strongest Earnings Trends?

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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’).

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Here’s your Cheat Sheet to how these 5 pharma stocks rank via earnings trends:

Jazz Pharmaceuticals, Inc. (NASDAQ:JAZZ): Current Price $58.41

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 67.51 128.45 173.78 272.28 585.98
Diluted EPS ($) -7.19 -0.23 0.83 2.67 4.79

We note that 2010 marked a watershed in Jazz’ performance and that subsequently the company was able to dramatically improve its revenue and EPS. Smart acquisitions, of course, played a major role…

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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 ($) in millions 83.54 108.41 129.54 175.52 172.51
Diluted EPS ($) 0.79 0.48 0.45 0.55 3.31

We note that EPS rocketed north in the latest quarter and keep Jazz in focus in this analysis…

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