6 Stocks with Hot Earnings Streaks

There are, surprisingly, very few companies that can actually beat earnings per share estimates consistently quarter after quarter, year after year. Here are six stocks that haven't missed in five years.

This article was originally published by Zacks.com.

Wall Street calls it “managing expectations.”

The rest of us call it “earnings season.”

Yet for all the talk about how good companies are at massaging their numbers so that they beat the EPS estimate, there are, surprisingly, very few that can actually beat consistently quarter after quarter, year after year.

Apple, for instance, used to be a member of this exclusive club. It hadn't missed for over five years until September 2011. Since that first miss, it has missed two out of the last four quarters.

In recent quarters, it seems to have gotten even more difficult to continue with these streaks. Oil States International was looking golden until last quarter when it missed by 11 cents, or 5.8%. AGCO also seemed to be on track to keep its hot streak but two quarters ago it suddenly missed by 5 cents, or 5%.

Never missing

I ran a screen on Zacks Research Wizard to find those companies that have either beaten or met estimates every quarter for the last five years. Those are the companies that have, technically, never missed. I came up with only 26 companies.

But if you want the “pure” beat, i.e. companies that have only beaten every single quarter with no quarters where it also met the estimate, then the number is even smaller. I found just six companies that haven't missed on earnings over the last five years.

That's out of 4,400 companies that Zacks covers.

Not only did these companies have to navigate the shock to the global economy in 2008 and 2009, but they also managed to beat estimates at the same time. Impressive.

Worth investing in?

But just because a company has managed its earnings reports well doesn't mean that it's necessarily worth buying. In this case, out of the 6 stocks, five are a Zacks Rank #3 (Hold) and one stock is a Zacks Rank #1 (Strong Buy).

Of course, anything can happen this earnings season (just ask Oil States), so the streak isn't a guarantee of future performance.

But it can be an indication of a management team that knows how to control expectations and then knows how to deliver just a little bit more than expected. It may not be a coincidence that Apple only started missing after Steve Jobs had died and new management had taken over.

Six stocks on a streak

Love 'em or hate 'em, these six stocks haven't missed in five years.

Can they keep it going this earnings season?

Jarden Corporation (JAH)

Jarden makes well-known consumer products like Mr. Coffee, Crockpot and First Alert.

Scheduled to report: April 24

Average surprise last four quarters: 7.3%

Zacks Rank #1 (Strong Buy)

Forward P/E: 13

Apollo Group Inc. (APOL)

Apollo is better known through its flagship brand, The University of Phoenix. The company provides online and on campus higher education in undergraduate, master's and doctoral programs.

Scheduled to report: June 24

Average surprise last four quarters: 38.9%

Zacks Rank #3 (Hold)

Forward P/E: 6.3

Dollar Tree Inc. (DLTR)

Dollar Tree operates thousands of stores in the lower 48 states which sell food and other consumer items for $1.00 each.

Scheduled to report: May 23

Average surprise last four quarters: 4.2%

Zacks Rank #3 (Hold)

Forward P/E: 16.9

Herbalife Limited (HLF)

Herbalife sells weight loss, energy, fitness and sports products through its network of independent distributors.

Scheduled to report: April 29

Average surprise last four quarters: 6.8%

Zacks Rank #3 (Hold)

Forward P/E: 7.6

Kadant Inc. (KAI)

Kadant has been serving global manufacturing customers for 100 years. It makes fiber processing products, fluid handling and doctoring, cleaning and filtration systems.

Scheduled to report: April 24

Average surprise last four quarters: 24.5%

Zacks Rank #3 (Hold)

Forward P/E: 10.9

Wyndham Worldwide Corporation (WYN)

Wyndham is one of the largest hospitality companies in the world with hotels, vacation rentals and fractional ownership properties.

Scheduled to report: April 24

Average surprise last four quarters: 4.8%

Zacks Rank #3 (Hold)

Forward P/E: 17.1

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec.

The information contained in this article should not be construed as investment advice or as a solicitation to buy or sell any stock. Nothing published by Physician’s Money Digest should be considered personalized investment advice. Physician’s Money Digest, its writers and editors, and Intellisphere LLC and its employees are not responsible for errors and/or omissions.