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Four Shockproof Stocks

Posted: Sep 16, 2009 11:18 AM by Billy Fisher

Tickers in this Article: PALM, AAPL, RIMM, GIS, BBBY, AZO

As more earnings results begin to trickle in, we will be able to gain a better read on the pulse of the consumer and how realistic hopes are for a full-fledged economic recovery. Here is what to expect when a few prominent consumer stocks report their quarterly results next week.

IN PICTURES: Seven Ways To Position Yourself For Recovery

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In the Zone
One company that has seen its stock standout despite a weakened economy has been the specialty retailer AutoZone (NYSE: AZO). Lower fuel prices and an environment which has favored companies in the do-it-yourself arena have both benefitted AutoZone, but the company has been getting it done for some time now.

Analysts are now expecting the company to keep alive its eleven consecutive quarter streak of double-digit EPS growth when it reports its fiscal year Q4 earnings before the market opens on Wednesday of next week.

Although fewer and fewer companies have been repurchasing stock in recent quarters in an effort to conserve cash, AutoZone has bucked the trend. The company bought back $65 million worth of its common shares last quarter at an average price of $145. This trend should give investors some degree of confidence that company management does not believe that its stock is overvalued.

Going Beyond
Another company that analysts are expecting to grow earnings on a year over year basis is Bed Bath & Beyond (Nasdaq: BBBY). The consensus is that EPS will come in a penny over prior year results and sales will be up 2.6% when the company reports its quarterly results on Wednesday.

Last quarter, Bed Bath & Beyond experienced a 13.3% rise in diluted EPS on a slight uptick in sales. Comparable store sales were down 1.6% however.

Breakfast of Champions
General Mills (NYSE: GIS) has been thriving despite having to face inflation on its input costs. In the company's fiscal Q4, volume increased slightly and margins remained consistent. Revenue from the company's U.S. operations was particularly strong. U.S. retail operating profits rose 30% on a year over year basis and Q4 retail net sales grew by 12%.

Analysts are predicting that General Mills will hold its ground when it too releases its quarterly results on Wednesday. Wall Street is calling for Q1 EPS to be up 6.3% with flat sales when compared to the year-ago quarter. This stock presently carries a healthy dividend yield of 3.1%.

On The Go
Research in Motion (Nasdaq: RIMM) is slated to announce its fiscal Q2 earnings after the market close on Thursday of next week. As this occurs, investors will be looking to see how new smart phone releases such as the Blackberry Tour have been able to rise up against competing devices from Apple (Nasdaq: AAPL) and Palm (Nasdaq: PALM) which have made waves in recent months with new offerings of their own.

Analysts are looking for a blow-out quarter with EPS spiking 16.3% on a 40.5% pop in sales.

The Bottom Line
Generally speaking, it is understandable for a company to expect a drop in earnings during a severe economic downturn. These four companies have been able to fend off such a pattern and have even prospered. As they release earnings next week, their results should further exhibit why these organizations have proven to be shockproof. (Read Buy When There's Blood In The Streets, to learn how contrarian investors find value in the worst market conditions.)

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By Billy Fisher

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