Quarterly earnings reports are a great opportunity for a company to release their “report cards” so that investors can evaluate all aspects of the company. This lets investors gain better insight into whether a company is a suitable investment candidate for their hard-earned dollars. These three companies have shown that they deserve your cash and should offer a respectful return over time.
Mobile ad growth drives strong quarter
Mobile ad dollars cleanly beat the Street’s estimates as mobile advertising accelerated in the quarter. This was helped by growth in both units sold and price per ad, as well as ads placed in the “news feed” of users. Mobile ad revenue grew 76% as compared to the previous quarter, totaling $656 million; this was an extremely impressive beat of $200 million. Needless to say, the sequential progress in mobile revenue was far more significant than what analysts and investors were expecting.
User engagement was also a concern as the site’s popularity has been questioned as of late. Looking closely at the numbers, the number of daily active users grew 27% year-over-year. CEO Mark Zuckerberg stated that people are spending more time on the site than ever before.
Both mobile ads and user engagement are reason enough to justify a higher share price and the stock should (rightfully) see continued price appreciation. It is likely that we will see the Street’s estimates revised higher for 2014 and 2015 given the company’s acceleration in mobile revenue and user engagement.
Strong beat, further upside to 2014
Visa Inc (NYSE:V) reported a healthy third quarter earnings per share of $1.88, a healthy beat of the $1.80 that the Street was looking for. Overall, the strong beat as well as the company’s full-year earnings per share guidance raise shows just why investors should purchase the company’s stock. It also demonstrates the sustainability of the company’s strong underlying growth, since its operating margin of 60.9% was well above consensus estimates of 59.3%.
Looking forward, the company projected revenue growth of approximately 13% and earnings per share growth in the low twenties. As if investors need further reason to purchase the stock, management also took the opportunity to update shareholders on share repurchases and announced a new $1.5 billion share repurchase program. This was in addition to the purchase of approximately $1 billion worth of stock that was completed during the quarter.
Shares of Visa Inc (NYSE:V) remain well positioned for continued outperformance from current levels. Analysts at Credit Suisse envision a price target of $210 based on stronger revenue growth. It is not too late for investors to jump in and buy shares, even near the historical all-time high; the company has been setting new highs and pleasing investors since 2011.
A stock everyone can find attractive
Ford Motor Company (NYSE:F) released second quarter earnings that presented a compelling case to attract new investors beyond the traditional automotive investor. Investors who are looking for a company with an extremely strong North American presence, a strong presence in Europe that can profit when the sector improves and rapid share growth internationally (particularly in China) have found such an investment in Ford Motor Company (NYSE:F).
North American strength persists as margins came in at 10.4% as the company capitalizes off of its operating leverage in a strong industry. Looking forward, the company is banking on the fact that its new F-150 models will continue driving profitability as demand for pickup trucks continue to quickly grow. The trucks can contribute up to 90% of the company’s profit. The new models will feature a better design that will meet future fuel economy standards.
The international strength and further growth prospects of the company represents an opportunity for the company as potentially lucrative markets are still in the early stages of growth. This allows the company to benefit from a better global product. After years of investing in Asia, the company may soon see the benefits as it struggles to keep up with demand in China. It has plans to open three new plants there to increase its market share in the world’s largest automotive market.
In terms of Europe, the company appears to be on track to break even by mid-decade according to analysts at Rosecliff Capital.
Bottom line investors can take solace in the fact that the company’s shares have limited (if any) downside. Its upside may be significant if European economic growth returns, and Asian operations open up a truly new market that could be a new leg for the company.
Conclusion
Visa Inc (NYSE:V) is my favorite pick out of these three companies. All three offer investors exposure to continued growth that can provide returns for years to come, however. Facebook Inc (NASDAQ:FB) would be the riskiest of the three as it has only just recently proved shorts and bears wrong; it will likely take at least another quarter of positive news before the average investor will associate it with future growth prospects and trust it as an investment.
The article Three Companies that You Should Buy Following Earnings originally appeared on Fool.com and is written by Jayson Derrick.
Jayson Derrick has no position in any stocks mentioned. The Motley Fool recommends Facebook Inc (NASDAQ:FB), Ford Motor Company (NYSE:F), and Visa Inc (NYSE:V). The Motley Fool owns shares of Facebook Inc (NASDAQ:FB) and Ford Motor Company (NYSE:F). Jayson is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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