Looking to the broader earnings landscape, investors have received disappointing reports from tech giant International Business Machines Corp. (NYSE:IBM) and global economic barometer Caterpillar Inc. (NYSE:CAT) in recent days. Market indices have remained resilient in the face of lukewarm earnings reports, weakening data points on long-term unemployment, and Europe teetering on recession.
Whether the market goes higher, lower, or sideways, I’m focused on making smart investments in individual stocks based on fundamentals. Here are three stocks I recommend for the long-term that are priced attractively into upcoming earnings:
General Motors Company (NYSE:GM)
Thursday, May 2 before market open; EPS $0.54 / Revenue $36.6 billion
General Motors Company (NYSE:GM) has been climbing out of the 2008-09 recession and bankruptcy at record speed, with the U.S. government continuing to reduce its ownership position in January, February, and March 2013.
On a fundamental basis, American vehicle sales rose 6% to 245,950 in March and global sales rose 3.6% during Q1, outpacing the industry average of 1.5% by more than double. Even more encouraging are recent comments from CEO Dan Akerson stating he sees strong demand for the next 4-5 years as Americans replace an aging vehicle fleet. The average vehicle currently has an 11 year life, the longest on record as consumers spend money maintaining their current rides.
Ahead of Thursday’s upcoming earnings release, analysts at Citigroup raised their price target on GM to $38 from a previous $35. The main reason for the price hike is the valuation of OnStar, General Motors Company (NYSE:GM)’s auto security and safety system which recently received an excellence accreditation for emergency dispatch. Citigroup’s analyst believes that OnStar could be worth as much as $7 to $8 billion in market capitalization, or $2 to $3 in additional share price for GM.
An additional catalyst for General Motors Company (NYSE:GM) is the company’s plans to release its next generation of Silverado and Sierra trucks later in 2013, which haven’t seen a refresh in multiple years.
Finally, the Treasury department has stated its plans to sell its final shares of General Motors Company (NYSE:GM) in early 2014. CEO Dan Akerson recently confirmed a March 2014 date with the Wall Street Journal, stating he’s eager for a government exit in order to restore his company’s blemished image.
I recommend the purchase of General Motors into upcoming earnings and longer-term into March 2014 when the U.S. Treasury plans to fully exit the company.
On a side note, insurer American International Group Inc (NYSE:AIG), which also received a bailout from the government, has continued to perform well since the U.S. Treasury sold its final shares in the company in December 2012. This should bode well for General Motors Company (NYSE:GM) as the situation is emblematic.
LinkedIn Corp (NYSE:LNKD)
Thursday, May 2 after market close; EPS $0.30 / Revenue $317.1 million
LinkedIn Corp (NYSE:LNKD), the social media giant of professional networking, continues to gain momentum both as a company and a stock. After falling as low as $63 following its May 2011 initial public offering, LinkedIn Corp (NYSE:LNKD) has now risen nearly 100% from its opening day of trade.
Shares moved explosively to the upside following Q4 2012 earnings on Feb. 7, and a handful of Wall Street analysts raised their FY 2013 estimates in the aftermath of the better-than-expected quarter. During Q4, management reported $0.35 vs. 0.19 consensus on revenue of $303.6 million. Guidance provided on the call for Thursday’s upcoming release is $305-$310 million revenue and earnings of $0.28-$0.30.
On a purely fundamental basis, LinkedIn Corp (NYSE:LNKD) is gaining traction in attracting recruiters who must pay to post jobs and draw high-quality candidates. Inversely, job seekers can upgrade their accounts and gain visibility from recruiters. This creates a win-win scenario for LinkedIn and its shareholders. Management also stated on the Q4 conference call that they are planning a small price hike during the calendar second quarter (April – June).
Separately from talent solutions, LinkedIn Corp (NYSE:LNKD) offers paid marketing solutions to corporate advertisers in a similar manner as Facebook. All in all, LinkedIn has the most diversified revenue streams and remains my top pick in social media. My friend Guy Adami of CNBC’s Fast Money also continues to view LinkedIn positively on a short-term basis.
In short, I like LinkedIn both for the short- and long-term and I believe the company is taking market share from competitors Monster Worldwide and Gannett Co.’s CareerBuilder. I recommend the purchase of the stock into Thursday’s upcoming results.
Sirius XM Radio Inc (NASDAQ:SIRI)
Tuesday, April 30 before market open; EPS $0.03 / Revenue $908.2 million
Shares of Sirius XM Radio Inc (NASDAQ:SIRI) have pulled back modestly from a 52-week high of $3.25 reached in March 2013.
Chief Financial Officer David Frear recently presented at Piper Jaffray’s Technology, Media, and Telecommunications Conference which I profiled back on Mar. 12. Analysts at the New York-based Piper Jaffray maintain an “overweight” rating and $3.40 price target on the stock. Revenue at Sirius XM Radio Inc (NASDAQ:SIRI) has grown 12.9% in the last 12 months as the company is delivering strong subscriber growth.
Ahead of Tuesday’s upcoming earnings report, analysts at Citigroup similarly reiterated their “buy” rating and $3.60 price target on Sirius XM Radio Inc (NASDAQ:SIRI). The Wall Street firm views the recent decline in the stock from the 52-week high in March as unwarranted and recommends buying the stock into upcoming results.
Sirius XM Radio Inc (NASDAQ:SIRI) is also hosting its annual shareholder meeting in New York on Tuesday, May 21.
Foolish bottom line
While I advocate investing for the long-term, readers should consider General Motors Company (NYSE:GM), LinkedIn Corp (NYSE:LNKD), and Sirius XM Radio Inc (NASDAQ:SIRI) ahead of upcoming earnings reports. I believe all three stocks are providing attractive entry-points based on strong fundamental stories and the potential for further upside in the near-term.
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The article Three Stocks to Buy Ahead of Upcoming Reports originally appeared on Fool.com and is written by John Macris.
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