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 these top 5 pharma stocks rank via earnings trends:
Actavis Inc (NYSE:ACT): Current Price $84.11
|Revenue ($) in millions||2,536||2,793||3,567||4,584||5,915|
|Diluted EPS ($)||2.09||1.96||1.48||2.06||0.76|
We are impressed with rapid growth in turnover every year at Actavis, but are concerned that EPS in 2012 fell sharply.
Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:
|Quarter||Dec. 31, 2011||Mar. 31, 2012||Jun. 30, 2012||Sep. 30, 2012||Dec. 31, 2012|
|Revenue ($) in millions||1,545||1,524||1,355||1,285||1,750|
|Diluted EPS ($)||0.74||0.43||-0.49||0.60||0.21|
We are disappointed that EPS in the December 2012 quarter also took a hit, and we therefore drop Actavis from our watchlist…