Thursday
This will be a busy day for me. Nordstrom, Inc. (NYSE:JWN) has been one of the best run retail companies in the US, and I think it is a nice way to play higher end retail spending, while avoiding the exposure to China that you get with, say Burberry’s, Coach, Inc. (NYSE:COH) or LVMH. Nordstrom has been reporting good sales growth at the Rack, and investors should look out for how it is integrating the acquired online businesses, as well as its own online activities. There are a lot of moving parts to Nordstrom (not least its credit facility,) and most of them are going in the right direction. There is some concern that its online and Rack stores may erode the value of its core stores, but there is no sign of this yet.
Hewlett-Packard Company (NYSE:HPQ) will try and convince investors that a turnaround is in the prospects, but I’m not expecting anything here. TreeHouse Foods Inc. (NYSE:THS) is an exasperating stock. Theoretically it should be a great play on ‘trading down’ but in reality it has faced many structural challenges this year as its sales channels have changed.
The three really interesting companies reporting today are Aruba Networks, Inc. (NASDAQ:ARUN), Intuit Inc. (NASDAQ:INTU) and Patterson Companies, Inc. (NASDAQ:PDCO).
Aruba is a play on the growth of Wi-Fi networking and Bring Your Own Device, or BYOD, in the workplace. Its main rival is Cisco Systems, Inc. (NASDAQ:CSCO), who just reported strong growth in this segment while other anecdotal evidence also suggests that the BYOD market is in good health. I covered Aruba in an article linked here. The key questions for Aruba are related to encroaching competition within its key verticals: government, health care and education.
I think Intuit is an undervalued cloud play. While its DIY consumer tax offering, Turbotax, is well known and capable of achieving single digit growth rates, I also like the prospects at its small business group. Its employee management, financial management and payment solutions business are all growing in the mid teens, and the opportunity to cross sell these solutions is significant. Indeed, Intuit knows how to scale up synergy benefits from growing SaaS solutions, because it has already done it with Consumer Tax. Moreover, the increasing diversification should lead to a re-rating for this highly cash generative company.
Patterson Companies is attractively evaluated, but it has reported disappointing results in its dental equipment sales for a few quarters now. I originally covered the stock in an article linked here. However, I really like the expansion of its distribution activities with Sirona Dental Systems, Inc. (NASDAQ:SIRO), and provided it can sort out the core dental equipment business then it has good prospects.
Patterson also has a fast growing veterinary supplies business, and with companies like MWI Veterinary Supply, Inc. (NASDAQ:MWIV) reporting strong numbers recently, I would expect good numbers here. Patterson is one of the few defensive plays that is still at a cheap valuation, and I plan to take a closer look.
Friday
A couple of aerospace companies give numbers on Friday. Barnes Group Inc. (NYSE:B) and HEICO Corporation (NYSE:HEI) are relatively unknown companies, but I like their prospects. In particular Heico has some good secular growth prospects as airlines continue to try and cut costs via outsourcing services and buying replacement parts from sources other than the OEM.
The article The Key Earnings for the Week Ahead originally appeared on Fool.com and is written by Lee Samaha.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
